Sources: Gusto paid $ 600 million to obtain a guideline, plans to assign customers associated with opponents

Last month, Gusto, a payroll and human resources software company, announced that this agreed to acquire Guide, a starting start that offers retirement plans to small and medium -sized enterprises.

The terms of the agreement were not revealed, but Gusto paid about $ 600 million, according to a source familiar with the deal, although TechCrunch could not confirm how much of it was cash and how much the stock was.

The guideline was last valued at 1.15 billion $ in 2021 when he set a Series of $ 200 million Round of funding. Since its founding in 2015, it has increased a total of $ 340 million. While the acquisition price is under the private starting valuation, company investors, including Felicis, Tiger Global and Nea, will probably realize the return. The Atlantic, who led the company D’s series, is expected to make a small profit in its investment, sources say.

Founded by former co -founder of Taskrabbit Kevin Busque, the guideline helps small and medium -sized enterprises easily install and manage 401 (k) plans. It charges a flat fee per employer instead of the traditional billing model of a percentage of asset management. CNBC reported that the annual repetitive revenue (ARR) of the guideline (ARR), a measurement measuring the predictable annual income from subscriptions, was $ 140 million From last January.

Gusto, founded in 2011 and valued at $ 9.3 billion, offers 401 (k) pension plans to its customers through cooperation with the guideline since 2015, but the relationship of the guideline with Gusto is not exclusive. Customers can also create guideline retirement plans through other payroll providers such as ADP, Intuit, Paylocity, Truet and Ripple.

According to three sources familiar with the transaction, Gusto is trying to sell the guideline accounts associated with competing payroll companies. Revenue from these sales will be shared between Gusto shareholders and guidelines, a person said familiar with the deal, possibly increasing returns for investors even more.

Gusto refused to comment on the price of the agreement and the divestiture plans.

The guideline spokesman described the price of $ 600 million as incorrect without providing further information and said the company is not planning to separate ways with any of its customers as part of its sale to Gusto.

While this seems to be a profitable transaction for shareholders of the guideline, the company’s logic for sale remains unclear. The company was profitable for more than a year, the company spokesman confirmed. However, he faces plenty of competition, such as from human interest, his nearest opponent, supported by Softbank and Baillie Gifford. Human interest increased by 70% last year and is expected to be profitable by the end of the year, said co -founder and chief executive of Jeff Schneble. Human interest is in conversations to raise $ 200 million in $ 3 billion assessment, doubling its valuation a year ago, information referenced. Schneble refused to comment on the company’s capital rally plans.