Gusto agrees to buy retirement plan provider Guideline

Gusto, a notable player in payroll and human resources software, has announced its plans to acquire Guideline, a company that focuses on corporate retirement solutions. While the financial terms of the acquisition remain undisclosed, this strategic move signifies Gusto's ambition to enhance its service offerings. Founded in 2011 in San Francisco, Gusto is recognized as one of the most valuable startups in the venture capital landscape, boasting a valuation of $9.3 billion. Originally launched as ZenPayroll, the company rebranded to Gusto in 2015, expanding its services to include health insurance and workers' compensation alongside payroll management. Since 2016, Gusto has collaborated with Guideline to provide 401(k) retirement plans, although organizations can still access Guideline's services through various other payroll providers, including ADP and Intuit. Kevin Busque, Guideline's co-founder and CEO, confirmed in a recent interview that these integrations will remain intact even post-acquisition. Both companies are committed to serving the small business sector, with Guideline employing over 400 staff members and achieving a valuation of $1.15 billion in 2021. Gusto employs more than 2,800 individuals and reported over $500 million in annualized revenue as of 2023, while Guideline's annual revenue reached $140 million as of January. As Gusto embarks on this acquisition, the company aims to onboard an additional 150,000 clients this year, a modest goal compared to the 6 million employers across the U.S. Josh Reeves, Gusto's co-founder and CEO, emphasized the company's growth potential, stating that their current customer base exceeds 400,000 and remains primarily focused on the U.S. market. Following the acquisition, Gusto plans to offer Guideline’s services to a broader range of clients and expand operations in states with laws mandating retirement plans for employees.