In September, ZenPayroll rebranded to the name Gusto, as it expanded to help business owners with more than just payroll services. CEO Josh Reeves told Business Insider then that the name change “is something we’ve been aware of and knew we were going to do since month three of the company.”
The San Francisco-based company offers a cloud-based system to automate tax calculations and payroll payments. Its web-based services are used by more than 20,000 small businesses.
In September, the company announced it would provide health benefits and workers’ compensation to these businesses as well, so employers and employees can use Gusto’s system as a one-stop shop for all their compensation-based needs.
With the announcement, it seemed Gusto and Zenefits, a $4.5 billion company that lets employers manage their benefits, were squaring up to become rivals, though the two companies have worked closely in the past. Zenefits is working on a system to process payroll, according to a BuzzFeed report earlier this year, and Gusto is breaking into handling benefits.
Gusto, which was valued at $560 million after the company announced a $60 million Series B round of funding led by Google Capital earlier this year, says it processes billions of dollars in payroll annually and works with businesses in every US state. It’s unclear if the new round of funding Gusto is seeking will push its valuation up past $1 billion, allowing it to join an ever-expanding list of more than 140 companies with such valuations.
Gusto is popular with top Silicon Valley CEOs too. A list of angel investors in the company, disclosed in November, reads like a who’s who of Silicon Valley.
CEOs of companies including Stripe, Evernote, Eventbrite, Instagram, and WordPress all invested in the company’s $20 million Series A round. Ashton Kutcher, Jared Leto, and founders of tech companies including PayPal, Nest, Mint, Twitter, and Reddit also participated.