Gusto
Total amount raised
$2 Billions
Latest funding date
July, 2018
Gusto
Location
Title
Gusto has successfully raised $276.1 million over five funding rounds, achieving a valuation of $2 billion. The platform offers a comprehensive suite of services, including payroll, HR, and employee benefits, tailored for small and medium-sized businesses.
Keep reading to explore the intricacies of Gusto's fundraising journey and the investors backing this innovative platform.
What Is Gusto?
Gusto, founded by Edward Kim and Tomer London, is a modern online people platform that helps small businesses manage their teams. Established in 2012, the company is headquartered in San Francisco, with additional offices in Denver and New York City.
Gusto offers a comprehensive suite of services, including payroll, HR, employee benefits, and tax credits, tailored for small and medium-sized businesses. The platform serves over 100,000 businesses nationwide, providing tools for payroll automation, health insurance, 401(k)s, and more.
With a workforce of 1001-5000 employees, Gusto continues to expand its operations and enhance its offerings to meet the evolving needs of its clients. The company is committed to simplifying complex business processes and improving the overall employee experience.
How Much Funding Has Gusto Raised?
- Seed
- Amount Raised: $6,100,000
- Date: December 2012
- Motivation Behind the Round: To develop the initial product and market fit.
- Series A
- Amount Raised: $20,000,000
- Date: February 2014
- Lead Investors: General Catalyst Partners, Kleiner Perkins Caufield & Byers
- Valuation at Round: Above $100 million but below $150 million
- Motivation Behind the Round: To accelerate growth, expand the product, and hire more engineers and product developers.
- Series B (First Round)
- Amount Raised: $60,000,000
- Date: April 2015
- Lead Investors: Google Capital
- Valuation at Round: $500 million
- Motivation Behind the Round: To expand the staff and national reach of the company.
- Series B (Second Round)
- Amount Raised: $50,000,000
- Date: December 2015
- Lead Investors: Google Capital, General Catalyst, Obvious Ventures
- Valuation at Round: $1 billion
- Motivation Behind the Round: Opportunistic funding to compete with Zenefits and capitalize on its issues with burn rate and growth.
- Series C
- Amount Raised: $140,000,000
- Date: July 2018
- Lead Investors: MSD Capital, Y Combinator, Dragoneer Investment Group, T. Rowe Price
- Valuation at Round: $2 billion
- Motivation Behind the Round: To support Gusto's long-term mission of building a company that empowers a better life through work.
Total Amount Raised: $276,100,000. Current Valuation: $2 billion.
Key Investors
- Y Combinator
- Details: Y Combinator is a startup accelerator that provides seed funding, advice, and connections to early-stage startups. It has been instrumental in the growth of numerous successful companies.
- Investment Focus Areas: Software, hardware, healthcare, biotech.
- Notable Investments: Airbnb, Dropbox, Stripe.
- General Catalyst
- Details: General Catalyst is a venture capital firm that invests in early-stage and growth-stage companies. It has a strong track record of supporting innovative startups.
- Investment Focus Areas: Technology, healthcare, consumer services.
- Notable Investments: Snapchat, Stripe, Warby Parker.
- Google Capital
- Details: Google Capital, now known as CapitalG, is a growth equity investment fund backed by Alphabet Inc. It focuses on providing growth capital to more established companies.
- Investment Focus Areas: Technology, healthcare, consumer services.
- Notable Investments: Airbnb, Stripe, Duolingo.
- Dragoneer Investment Group
- Details: Dragoneer Investment Group is a long-term-oriented investment firm that focuses on backing exceptional management teams. It is known for its strategic investments in high-growth companies.
- Investment Focus Areas: Technology, consumer, healthcare.
- Notable Investments: Airbnb, Spotify, Uber.
- MSD Capital
- Details: MSD Capital is a private investment firm that manages the capital of Michael Dell and his family. It invests in a wide range of asset classes.
- Investment Focus Areas: Public equity, private equity, real estate.
- Notable Investments: Not explicitly mentioned.
What's Next for Gusto?
Gusto's future is brimming with opportunities, particularly in expanding its suite of HR and payroll services to a broader market. With substantial backing from investors like T. Rowe Price and General Catalyst, the company is well-positioned to enhance its product offerings and support long-term growth. The focus on simplifying complex business processes aligns with industry trends favoring user-friendly, tech-driven solutions for small and medium-sized enterprises.
Future fundraising efforts are likely as Gusto scales its operations and seeks to stay competitive in a rapidly evolving market. The company may also explore strategic acquisitions to bolster its service portfolio. However, challenges such as maintaining product quality and navigating intense competition from rivals like Zenefits remain. Ensuring compliance and data security will be crucial as Gusto continues to grow and innovate in the HR tech space.
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