Prime Highlights:
- Gusto, a San Francisco based payroll and HR software company, announced plans to acquire Guideline, a provider of 401(k) retirement plans for small businesses.
- The acquisition will help Gusto expand its retirement plan services, especially as new state rules require employers to offer such benefits.
Key Facts:
- Gusto, valued at $9.3 billion, employs over 2,800 peopleand generates more than $500 million in annual revenue.
- Guideline, founded in 2015, has over 400 employees, was valued at $1.15 billion in 2021, and reported $140 millionin annualized revenue as of January 2025.
Key Background:
San Francisco based Gusto, a payroll and HR software firm, said it will buy Guideline, a startup that offers 401(k) retirement plans to small businesses. The companies did not share the terms of the deal.
Gusto and Guideline have worked together since 2016, when Gusto started offering retirement plans to its clients through Guideline. With more U.S. states now requiring employers to give workers access to retirement plans, Gusto sees this deal as a way to grow its services and support more businesses.
Gusto began in 2011 under the name ZenPayroll, offering payroll software to small companies. In 2015, the firm was rebranded as Gusto, where it started to offer health insurance and workers’ compensation. Gusto is now a multi-billion-dollar company with a yearly revenue of over half a billion. It serves over 400,000 companies and tries to attract 150,000 new customers in the current year.
Guideline was founded in 2015 and has grown to over 400 employees. In 2021, the company was valued at $1.15 billion by investors. CEO Kevin Busque said these partnerships will stay in place even after the deal with Gusto is completed.
Gusto CEO Josh Reeves said the acquisition will allow Gusto to sell retirement services directly to its customers without sharing revenue. He also said the company will expand faster in states that now require retirement plan access for employees.
By bringing Guideline on board, Gusto aims to become a one-stop solution for small businesses, offering payroll, HR, insurance, and retirement benefits all in one platform.
