As AI transformation threatens many established SaaS firms, some HR tech startups are flourishing. Among them is Gusto, a small-business payroll provider. Founded 14 years ago and valued at over $9 billion, Gusto announced it surpassed $1 billion in revenue this year. Unlike many startups that tout annualized recurring revenue (ARR) — predicting the contract value for the next 12 months — Gusto reports actual revenue from the past year.
Gusto was most recently valued at $9.3 billion, as reported by Fortune, when it launched a $200 million tender offer for employees in June 2025, maintaining a similar valuation to early 2022.
This presents a good deal for Gusto’s investors compared to its decacorn competitors. For instance, Deel, catering to large international firms, surpassed $1 billion in ARR last year and was valued at $17.3 billion after raising $300 million, with Ribbit Capital and Andreessen Horowitz co-leading the round.
Meanwhile, Deel’s main competitor, Rippling, announced it hit $1 billion in ARR last month and was valued at $16.8 billion after a $450 million fundraising in May 2025.
Achieving the $1 billion revenue mark showcases Gusto’s financial strength against its rivals.
The company has also expanded with strategic acquisitions. Last year, Gusto purchased Guideline, a startup offering retirement plans to small and medium businesses, for about $600 million.
Following Anthropic CTO Rahul Patil’s December board appointment, Gusto reports significant efficiency improvements, with AI responsible for 50% of new code generation and managing an equal portion of customer support cases.
Given its comparatively modest valuation relative to revenue, Gusto is poised for another funding round or even an IPO at a higher valuation. Unlike competitors Deel and Rippling, embroiled in a public corporate espionage lawsuit, Gusto has remained focused on its business and kept out of negative headlines.
Gusto has been seen as a potential IPO candidate, although a public debut seems uncertain in 2026, with the IPO market still cool.
In a December interview with TechCrunch, Gusto CEO and co-founder Josh Reeves said he doesn’t prioritize IPO plans, focusing instead on customer satisfaction and scaling the business.
Regarding whether recent revenue milestones changed this stance, Gusto remains silent. A spokesperson merely stated: “Nothing to share on the IPO timeline front.”