Gusto acquires retirement tech startup Guideline to expand HR and payroll platform

Gusto is making a big move to broaden its reach in small business benefits. The $9.3 billion payroll and HR startup announced Wednesday that it has agreed to acquire Guideline, a company known for making corporate retirement plans more accessible. The price tag wasn’t disclosed.

The deal brings two longtime partners under one roof. Gusto, originally launched in 2011 as ZenPayroll, started out helping businesses run payroll before branching into health insurance and workers’ compensation. By 2015, it had rebranded as Gusto, and a year later, it teamed up with Guideline to offer 401(k) retirement plans to its clients.

“Guideline has entered an agreement to be acquired by @GustoHQ. For 10 years, our mission has been to help everyone arrive at a secure retirement, making saving simple, affordable, and accessible for more than 1M savers and nearly 65,000 businesses,” Guideline confirmed the acquisition in a post on X.

Guideline, founded in 2015, has grown into one of the most recognizable names in digital retirement services, with more than 400 employees and annualized revenue of $140 million as of January. In 2021, investors valued the company at $1.15 billion. Its plans integrate with a range of payroll providers, including ADP, Intuit, Paylocity, TriNet, Rippling, and Block. Those integrations will remain intact, Guideline co-founder and CEO Kevin Busque told CNBC.

Payroll Startup Gusto Acquires Retirement Plan Provider Guideline, Strengthening Its Push Into 401(k) Plans

For Gusto, bringing Guideline in-house is about more than eliminating revenue-sharing agreements. The startup has its sights set on scaling aggressively. With more than 400,000 customers today and over $500 million in annualized revenue, Gusto wants to add 150,000 new clients this year. That number is a fraction of the roughly 6 million employers across the U.S., but CEO Josh Reeves says it’s just the start.

The timing could work in Gusto’s favor. A growing number of states are passing laws that require employers to offer retirement savings options to their workers. By owning Guideline outright, Gusto is positioning itself to capture a bigger piece of that demand.

Both companies share the same target audience—small businesses looking for affordable, simplified ways to handle payroll, benefits, and compliance. The acquisition gives Gusto more control over how those services are packaged and delivered, while giving Guideline the chance to scale with the backing of a much larger platform.

The Guideline deal marks another step in that expansion. For Gusto, it’s about tightening its grip on the small business market. For Guideline, it’s about plugging into a platform that can get its services in front of more employers at a faster clip.

Founded by Edward Kim, Josh Reeves, and Tomer London, Gusto has grown from a payroll startup into a full-stack HR platform that now employs more than 2,800 people. Its suite covers payroll, health benefits, workers’ comp, 401(k) plans, time tracking, and integrations that make it easier for employers and employees to manage everything from desktops or mobile devices.