Revenue
$600.00M
2024
Valuation
$9.50B
2021
Growth Rate (y/y)
33%
2024
Funding
$696.35M
2021
Valuation: $9.50B in 2021
Gusto has raised $696.35M and was last valued at $9.5B, with a valuation/revenue multiple of 36.5x. This is higher than legacy enterprise payroll companies like ADP (6.1x) and Paychex (11.4x), though these companies saw flat revenue growth in 2021 while Gusto grew at about 58% YoY.
Scenarios: $1.3B to $4.7B ARR by 2028
To evaluate Gusto's potential future value, we've modeled several scenarios based on different growth trajectories and revenue multiples through 2028. These projections consider various factors including market conditions, competitive dynamics, and the company's historical growth rate of 58% YoY.
| 2023 Revenue ($M) | $600M | ||
|---|---|---|---|
| 2023 Growth Rate (%) | 33.33% |
Current revenue metrics show Gusto generating $600M in 2023 with a 33.33% growth rate, indicating solid but moderating expansion compared to its historical 58% growth. While growth has slowed, the company maintains strong momentum in the competitive SMB payroll space.
| Multiple | Valuation |
|---|---|
| 1x | $600M |
| 5x | $3B |
| 10x | $6B |
| 15x | $9B |
| 25x | $15B |
Based on current revenue of $600M, valuations span from $600M at 1x to $15B at 25x multiple. The 15x scenario yields a $9B valuation, close to Gusto's 2021 valuation of $9.5B, while higher multiples could justify further upside if growth trajectory remains strong.
| 2028 Growth Rate | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 |
|---|---|---|---|---|---|---|
| 10.0% | $600M | $762M | $928M | $1.1B | $1.2B | $1.3B |
| 15.0% | $600M | $770M | $957M | $1.1B | $1.3B | $1.5B |
| 20.0% | $600M | $778M | $986M | $1.2B | $1.5B | $1.8B |
| 25.0% | $600M | $787M | $1B | $1.3B | $1.6B | $2B |
| 35.0% | $600M | $803M | $1.1B | $1.4B | $2B | $2.6B |
| 40.0% | $600M | $811M | $1.1B | $1.5B | $2.1B | $3B |
| 45.0% | $600M | $819M | $1.1B | $1.6B | $2.3B | $3.4B |
| 50.0% | $600M | $827M | $1.2B | $1.7B | $2.5B | $3.8B |
| 60.0% | $600M | $843M | $1.2B | $1.9B | $3B | $4.7B |
Revenue projections through 2028 span from $1.3B at 10% growth to $4.7B at 60% growth, representing potential 2.2x to 7.9x expansion from 2023's $600M baseline. This range reflects varying scenarios from modest maturation to continued hypergrowth in the SMB payroll space.
| 2028 Growth Rate | 1x | 5x | 10x | 15x | 25x |
|---|---|---|---|---|---|
| 10.0% | $1.3B | $6.7B | $13.4B | $20.1B | $33.4B |
| 15.0% | $1.5B | $7.7B | $15.5B | $23.2B | $38.7B |
| 20.0% | $1.8B | $8.9B | $17.8B | $26.7B | $44.5B |
| 25.0% | $2B | $10.2B | $20.4B | $30.5B | $50.9B |
| 35.0% | $2.6B | $13.2B | $26.4B | $39.6B | $65.9B |
| 40.0% | $3B | $14.9B | $29.8B | $44.8B | $74.6B |
| 45.0% | $3.4B | $16.8B | $33.7B | $50.5B | $84.2B |
| 50.0% | $3.8B | $18.9B | $37.8B | $56.8B | $94.6B |
| 60.0% | $4.7B | $23.7B | $47.4B | $71.1B | $118.5B |
Projected 2028 valuations range from $1.3B at conservative growth/multiple assumptions (10% growth, 1x) to $118.5B in an aggressive scenario (60% growth, 25x), highlighting significant upside potential but also uncertainty in Gusto's long-term trajectory as it navigates the competitive SMB payroll space.
Bear, Base, and Bull Cases: 8.5x, 10.5x, 12.5x
Building on the revenue projections, we've developed bear, base, and bull case scenarios using multiples of 8.5x, 10.5x, and 12.5x respectively. These scenarios reflect varying market conditions, competitive dynamics, and Gusto's potential execution in the SMB payroll space through 2028.
| Scenario | 2028 Growth Rate (%) | Multiple |
|---|---|---|
| Bear 🐻 | 15% | 8.5 |
| Base 📈 | 25% | 10.5 |
| Bull 🚀 | 45% | 12.5 |
Growth projections range from conservative (15% with 8.5x multiple) to aggressive (45% with 12.5x multiple), with multiples notably higher than traditional payroll companies. Even the bear case reflects market confidence in Gusto's potential to maintain strong growth in the SMB payroll and HR services space.
| Bear 🐻 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 |
|---|---|---|---|---|---|---|
| Revenue | $600M | $770M | $957M | $1.1B | $1.3B | $1.5B |
| Growth | 33.33% | 28.40% | 24.17% | 19.93% | 17.19% | 15% |
| Base 📈 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 |
|---|---|---|---|---|---|---|
| Revenue | $600M | $787M | $1B | $1.3B | $1.6B | $2B |
| Growth | 33.33% | 31.09% | 29.17% | 27.24% | 25.99% | 25% |
| Bull 🚀 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 |
|---|---|---|---|---|---|---|
| Revenue | $600M | $819M | $1.1B | $1.6B | $2.3B | $3.4B |
| Growth | 33.33% | 36.47% | 39.17% | 41.86% | 43.61% | 45% |
Our bear, base, and bull cases for Gusto reflect varying scenarios of market competition, strategic execution, and growth sustainability through 2028
- In the bear case, increasing competition and challenges in market expansion lead to declining growth to 15% and a final valuation of $13.1B ($1.5B revenue at 8.5x multiple)
- In the base case, steady ecosystem expansion and strategic partnerships maintain 25% growth, resulting in a $21.4B valuation ($2.0B revenue at 10.5x multiple)
- In the bull case, successful platform dominance and new revenue streams drive 45% growth, achieving a $42.1B valuation ($3.4B revenue at 12.5x multiple).
| Scenario | 1. Bear 🐻 | 2. Base 📈 | 3. Bull 🚀 |
|---|---|---|---|
| 2023 Revenue | $600M | $600M | $600M |
| 2023 Growth Rate (%) | 33% | 33% | 33% |
| 2023 Multiple | 8.5 | 10.5 | 12.5 |
| 2023 Valuation | $5.1B | $6.3B | $7.5B |
| 2028 Revenue | $1.5B | $2B | $3.4B |
| 2028 Growth Rate (%) | 15% | 25% | 45% |
| Multiple | 8.5 | 10.5 | 12.5 |
| 2028 Valuation | $13.1B | $21.4B | $42.1B |
The uncertainty around these three cases depends primarily on Gusto's ability to maintain competitive advantage against established players, successfully expand its ecosystem through partnerships and embedded payroll, and leverage its existing customer base to become the dominant platform for SMB payroll, HR, and financial services.
- In the Bear case: Increasing competition from both established players (ADP, Paychex) and well-funded startups (Rippling, Deel) forces Gusto to reduce prices and increase spending on sales and marketing, while its expansion into international markets and embedded payroll fails to gain meaningful traction.
- In the Base case: Gusto maintains its strong position in the SMB market while gradually expanding its ecosystem through strategic partnerships and its embedded payroll API offering, achieving steady growth but facing some margin pressure as it invests in new initiatives.
- In the Bull case: Gusto successfully leverages its 300,000+ customer base to become the dominant platform for SMB payroll, HR, and financial services, while its partnership with Remote and embedded payroll offerings create powerful new revenue streams in the global payroll and vertical SaaS markets.
The final valuations present a wide range of potential outcomes for Gusto. The bear case projects a $13.1B valuation by 2028, while the base case reaches $21.4B and the bull case achieves $42.1B, reflecting varying scenarios of market penetration and ecosystem expansion success.
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