Sources: Gusto paid $600M to acquire Guideline, plans to divest customers linked to rivals | TechCrunch

"Guideline was last valued at $1.15 billion in 2021 when it raised a $200 million Series D funding round. Since its founding in 2015, it has raised a total of $340 million. While the acquisition price is below the startup's private valuation, the company's early-stage investors, including Felicis, Tiger Global, and NEA, will likely realize a return. General Atlantic, which led the company's Series D, is expected to earn a small profit on its investment, too, sources say."

"Gusto, which was founded in 2011 and is valued at $9.3 billion, has been offering 401(k) retirement plans to its customers through a partnership with Guideline since 2015. But Guideline's relationship with Gusto isn't exclusive. Customers can also set up Guideline retirement plans through other payroll providers like ADP, Intuit, Paylocity, TriNet, and Rippling. According to three sources familiar with the transaction, Gusto is looking to sell off Guideline's accounts associated with rival payroll companies."

Gusto agreed to acquire Guideline, a startup that helps small and medium-sized businesses set up and manage 401(k) plans, for approximately $600 million. Guideline charges a flat, per-employee fee and reported $140 million in annualized recurring revenue as of January. Guideline was valued at $1.15 billion in 2021 and has raised $340 million since 2015. Early investors including Felicis, Tiger Global, NEA, and General Atlantic are expected to see returns. Gusto has partnered with Guideline since 2015 and plans to sell accounts tied to rival payroll providers, sharing proceeds with Guideline shareholders.

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