Payroll, benefits and HR technology platform Gusto has raised $140 million in a Series C funding round to build out its offering.
Launched in 2012, US-based Gusto processes ‘tens of billions of dollars’ of payroll and empowers employers to provide benefits like health insurance, retirement plans and college savings plans for SMEs, that traditionally only larger companies could offer their employees.
Leading late-stage investors included portfolios managed by T. Rowe Price Associates, Inc., MSD Capital (Michael Dell), Dragoneer Investment Group and Y Combinator Continuity Fund participated and are joined by existing investors General Catalyst, CapitalG, Kleiner Perkins, 137 Ventures, Emergence Capital and others.
The investment will be used to drive additions to Gusto’s all-in-one payroll, benefits and HR platform, including new capabilities to help employees manage when and how they get paid. The company recently launched Flexible Pay, which lets employees choose when they want to get paid, regardless of their employer’s pay schedule and without affecting their employer’s payroll or cash flow.
“We are thrilled to welcome these long-term investors to the Gusto community. They share our passion for creating a world where work empowers a better life,” said Josh Reeves, Gusto co-founder and CEO. “We chose these investors because they care about enabling small businesses with modern payroll, benefits and HR. There are millions of companies out there to help, and this is a long-term journey for us. We’re just getting started.”
“We believe Gusto has an opportunity beyond the payroll category in which they have demonstrated leadership for the last six years,” said Henry Ellenbogen, T. Rowe Price New Horizons Fund portfolio manager. “The company has a strong and focused management team, and it has the potential to become much larger as it expands its efforts to employees who seek to improve their financial mobility and achieve greater personal prosperity.”
“We are thrilled to deepen our support for Josh and the team. They have created an incredible opportunity with small businesses, which are responsible for two-thirds of the net new jobs and half of the U.S.’s GDP,” said Ken Chenault, General Catalyst chairman and managing director. “Gusto is supporting entrepreneurs and family-run companies that have been left behind by others while becoming the growing standard for small businesses.”