While AI disruption looms over many legacy SaaS companies, several HR tech startups seem to be thriving.
One of these companies is small-business payroll provider Gusto. The 14-year-old company, last valued at over $9 billion, just announced that it surpassed $1 billion in revenue earlier this year. Unlike many startups that report annualized recurring revenue (ARR) — an estimate of the value of their contracts in the upcoming 12 months — Gusto’s figure represents actual revenue earned over the previous 12 months. What’s more, the startup has been cash flow positive for several years. Its revenue growth has also accelerated in each of the last five quarters, Gusto CEO and co-founder Josh Reeves told TechCrunch.
Gusto was last valued at $9.3 billion, Fortune reported, when it launched a $200 million tender offer for its employees in June 2025. The deal valued the company about where it was valued in early 2022.
That’s a bargain for Gusto investors compared to its decacorn competitors. For instance, Deel, which serves large international businesses, crossed $1 billion in ARR last year. The company was last valued at $17.3 billion when it raised a $300 million round co-led by Ribbit Capital and Andreessen Horowitz in October.
Meanwhile, Deel’s primary rival, Rippling, which last month announced that it also hit $1 billion in ARR, was last valued at $16.8 billion after raising $450 million in May 2025.
By crossing the $1 billion revenue threshold, Gusto is clearly showing its financial might against its peers.
The company has been making other big moves, too. Last year, it completed the acquisition of Guideline, a startup offering retirement plans to small and medium businesses, for about $600 million, as we reported.
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Following the December board appointment of Anthropic CTO Rahul Patil, Gusto is already reporting massive efficiency gains. According to the company, AI now accounts for 50% of all new code generation and handles an equal share of customer support cases.
Given its relatively modest valuation compared to its revenue, Gusto is well-positioned for another fundraise, or even an IPO, at a higher valuation. The company has another key factor in its favor. While rivals Deel and Rippling remain embroiled in a high-profile corporate espionage lawsuit, Gusto has stayed out of those kinds of headlines and focused on its business.
Gusto has long been considered an IPO candidate. Even so, a public debut appears iffy in 2026 while the IPO market still remains so frosty.
When TechCrunch interviewed Reeves in December, he insisted he doesn’t spend much time thinking about an IPO, preferring instead to focus on serving customers and scaling the business.
As for if that’s changed given the revenue milestone, the company won’t say. A Gusto spokesperson tells us: “Nothing to share on the IPO timeline front.”
Note: This story was updated to include more details on financial health from CEO Josh Reeves.
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