- Gusto — a people platform that helps small businesses take care of teams — announced it raised $200 million
Gusto — a people platform that helps small businesses take care of their teams — announced that it has raised $200 million in Series D funding from new investors Fidelity Management & Research Company and Generation Investment Management along with existing investors Dragoneer Investment Group, General Catalyst, and those advised by T. Rowe Price Associates. And the company also revealed that it named Anne Raimondi to its board of directors. According to Business Insider, this round of funding was at a $3.8 billion valuation.
“As Gusto continues to scale, we’ve been intentional about choosing investors that optimize for the long term. We’ll be building Gusto for decades, and our goal is to be a durable and sustainable business,” said Gusto CEO and co-founder Josh Reeves. “Fidelity and Generation share our belief that the best business model is to align the success of your customers with your own success. Currently, only 50 percent of small businesses in America make it past year five. This is unacceptable, and we’re here to change that. Gusto is committed to increasing the durability of small businesses everywhere by helping them build great places to work where their employees thrive.”
This round of funding will be used for doubling down on R&D as Gusto continues the expansion of its people platform thus enabling small business owners and operators to onboard employees, pay them, provide health insurance, and support teams all in one integrated solution. Plus Gusto is planning to continue growing its team in Denver, San Francisco, and New York.
Raimondi has over two decades of experience growing B2B and B2C tech companies and turning them into household names. She is currently a board member at Asana and was previously a board member of SendGrid (acquired by Twilio). And Raimondi previously served as SVP of Operations at Zendesk where she helped guide the company from a venture-backed startup to being publicly traded. Plus she held senior leadership roles at Survey Monkey, Blue Nile, and eBay. And she is currently a lecturer at Stanford’s Graduate School of Business where she teaches two classes on entrepreneurship: “Startup Garage” and “POWer: Building the Entrepreneurial Mindset.”
“Generation’s investment in Gusto is rooted in our deep research into the future of compensation. We believe Gusto’s people platform has the potential to balance the disparity in benefits access, and sets a new industry model for what total compensation can look like for employees at companies of all sizes. Gusto has simplified payroll for more than 100,000 small businesses in the U.S. and has made health coverage available to many who would otherwise not have access to it,” added Shalini Rao — the Director in Growth Equity at Generation. “Josh and his team represent the model of business we look to support with our Sustainable Solutions Strategy–those accelerating the transition to a more sustainable economy.”
Gusto — which launched in 2012 — processed tens of billions of dollars of payroll annually and empowers small employers to provide robust benefits like health insurance, 401(k) retirement plans, and 529 college savings plans, which have traditionally been available through larger companies. Currently, Gusto serves more than 100,000 small businesses across the U.S.
“Small businesses play a vital role in our economy and are foundational to every community across the U.S. I’m inspired by Gusto’s dedication to empowering small businesses and how the team at Gusto has created an exceptional culture of service,” explained Raimondi. “I look forward to working with Josh and the team at Gusto as they continue to expand their impact on the more than 6 million small businesses nationwide.”
