Gusto (Company)

Gusto (Company)

Payroll and benefits company. It participated in the W12 cohort of Y Combinator.

Gusto (formerly ZenPayroll) is a San Francisco cloud-based onboarding, HRIS, and payroll tool.

History

Gusto was founded in 2011 by Josh Reeves, Tomer London and Edward Kim. They launched their initial payroll service in 2012.

The cloud-based SaaS handled the payroll functions of adding employee hours, overtime pay, bonuses, reimbursements, garnishments, benefits, pay issuance via check or direct deposit, tax calculation, deduction and filing to federal and state governments and reported new employees to the state. As well, it offers a dashboard where employers can view pending tasks, upcoming dates, past payroll cycles, employees pay stubs and report vacation and sick days.

Employees also get access to a personal profile where they can change payment settings, access pay stubs and employment documents, manage personal and financial details, and review pay and benefits.

With their payroll service, Gusto offers healthcare and other insurance benefits, handled through their platform. And they offer to help manage 401(k) plans, 529 college savings, flexible spending accounts, health savings accounts, commuter benefits and life and disability.

In 2014, Gusto opened an API which allowed cloud-based firms such as BambooHR and Zenefits to integrate Gusto's payroll services into their HR platforms.

Gusto launched Flexible Pay in 2018. This feature allows employees to receive income for work completed outside of a usual pay schedule.

Using data-analytics, Gusto is able to predict what a salary worker has earned and loans the money at what Gusto hopes is a lower risk. Through their platform, they keep employers books and paycheck distribution normalized. While the feature is a loan, Gusto expects to create a financial facility to underwrite Flexible Pay.

Gusto launched the beta for their HR Basics, a suite of tools for businesses to handle vacation time, employee directories and onboarding of new hires, in 2018.

Funding

Seed

Gusto graduated Y-Combinator Winter 2012 with $6.1 million raised, the largest in Y-Combinator history to that point. The round included Aaron Levie, David Sacks, Drew Houston, Jawed Karim, Jeremy Stoppelman, Kris Duggan, Larry Augustin, Tien Tzuo, Google Ventures, Data Collective, Sherpalo Ventures and Salesforce.com.

Series A

In February 2014, Gusto raised $20 million. General Catalyst Partners and Kleiner Perkins Caufield & Byers led the round, which included participation from Wayne Chang, Pivot Investment Partners, Obvious Ventures, Jeff Siebert, Designer Fund, Daniel Gross, AFSquare and #Angels.

Series B

Gusto raised $60 million in funding in April 2015. Google Capital (CapitalG) led the round with Google Ventures, Emergence Capital and Ribbit Capital, while Pivot Investment Partners, Kleiner Perkins Caufield & Byers, Glynn Capital Management, General Catalyst, Felicis Ventures and Designer Fund participated in the round.

The round valued Gusto at $560 million, up from $100 million the year before, and marked one of the first deals where Google Capital and Google Ventures invested in the same company.

Series B (part 2)

Gusto, which rebranded from Zenpayroll between their April 2015 Series B and their late November 2015 Series B, raised $50 million. Investors included Google Capital, General Catalyst, Obvious ventures, Slow Ventures, WME Ventures and Wayne Chang.

The funding came at a $1 billion pre-money valuation for Gusto.

Series C

Closed in July 2018, this funding round saw Gusto raise $140 million. T. Rowe Price Associates portfolio, MSD Capital, Dragoneer Investment Group and Y Combinator's Continuity Fund led the round which included General Catalyst, CapitalG, Kleiner Perkins, 137 Ventures and Emergence Capital.

Series D

Gusto announced a $200 million funding round in July 2019. Fidelity Management & Research Co. and Generation Investment Management led the round. Other participants included T. Rowe Price Associates Inc., Dragoneer Investment Group, and General Catalyst.

Gusto reached a $3.8 billion post-money valuation.

Timeline

July 2019

Gusto raises a $200,000,000 series D round from Fidelity Management & Research Company, General Catalyst, Fidelity Investments, Generation Investment Management, T. Rowe Price and Dragoneer Investment Group.

July 2018

Gusto raises a $140,000,000 series C round from Kleiner Perkins Caufield & Byers, 137 Ventures, General Catalyst, CapitalG, Y Combinator, Dragoneer Investment Group, T. Rowe Price, Emergence Capital Partners and MSD Capital.

Funding rounds

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2 Results
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People

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Role
LinkedIn

Aaron Patzer

Investor

Adam Foroughi

Investor

Adam Nash

Investor

AF Square

Investor

Akshay Kothari

Investor

Anand Swaminathan

Investor

Andrew Chen

Investor

Arjun Sethi

Investor

Ben Blumenfeld

Investor

Benjamin Ling

Investor

Blake Byers

Investor

Bobby Yazdani

Investor

Chung-Man Tam

Investor

Dan Veltri

Investor

Daniel Clemens

Investor

Daniel Gross

Investor

David Popowitz

Investor

Ed Baker

Investor

Edward Kim

Co founder

Elad Gil

Investor

Enrique Allen

Investor

Felix Shpilman

Investor

Gary Benitt

Investor

Jacob Jaber

Investor

Jared Kopf

Investor

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Further reading

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Documentaries, videos and podcasts

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Companies

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News

Title
Author
Date
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Description
Josh Constine
February 17, 2020
TechCrunch
Remember when Zenefits imploded, and kicked out CEO Parker Conrad. Well, Conrad launched a new employee onboarding startup called Rippling, and now he's going after another HR company called Gusto with a new billboard, "Outgrowing Gusto? Presto change-o." The problem is, Gusto got it taken down by issuing a cease & desist order to Rippling [...]
Katie Canales
December 8, 2019
Business Insider
In Silicon Valley's lax office culture, being barefoot in the workplace isn't a question of why, but why not?
Danny Crichton
July 24, 2019
TechCrunch
Every employee loves receiving their paycheck. It just so happens, though, that paying employees can be a royal pain, what with incredibly diverse labor laws across all 50 U.S. states. While large, Fortune 500 employers have a bevy of options, from traditional firms like ADP to newer entrants like Workday, small and medium businesses (SMBs) [...]

References

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