Payroll and HR software provider Gusto has acquired retirement plan startup Guideline, the companies announced last month. The deal terms weren’t officially disclosed, but a source familiar with the matter told TechCrunch that the transaction was valued at approximately $600 million. It remains unclear how much of the purchase involved cash versus stock.
Guideline, founded in 2015 by TaskRabbit co-founder Kevin Busque, was last valued at $1.15 billion during its 2021 $200 million Series D round. In total, the company has raised $340 million from backers including Felicis, Tiger Global, NEA, and General Atlantic. While the reported acquisition price sits below Guideline’s peak valuation, early investors are expected to see returns, with General Atlantic likely to earn a modest profit.
Guideline specializes in simplifying 401(k) retirement plans for small and medium-sized businesses by charging a flat per-employee fee rather than the traditional percentage of assets under management. The company’s annual recurring revenue (ARR) reached $140 million as of January, according to CNBC.
Gusto, valued at $9.3 billion, has been offering Guideline-powered retirement plans to its own payroll customers since 2015. However, Guideline also partners with rival payroll providers including ADP, Intuit, Paylocity, TriNet, and Rippling. Sources familiar with the transaction said Gusto may sell off Guideline’s accounts linked to competitors, potentially boosting returns for both Gusto and Guideline shareholders. Gusto declined to comment on those claims.
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Guideline’s spokesperson disputed the reported $600 million valuation and said the company does not plan to part ways with customers following the acquisition. Despite being profitable for over a year, Guideline faces intensifying competition from startups like Human Interest, which is backed by SoftBank and Baillie Gifford. Human Interest grew 70% in 2024 and is reportedly seeking $200 million at a $3 billion valuation, according to The Information.
The deal marks a major consolidation in the HR tech and retirement services space, where competition between fintech-backed disruptors and traditional providers is heating up.
