Enterprise

ZenPayroll Is Now Gusto, Adds Benefits To Take On Zenefits

Comment

Payroll startup ZenPayroll changed its name to Gusto today and is moving beyond payroll, into benefits such as health insurance and workers’ compensation.

Sound familiar? We’ve heard that cloud HR benefits company Zenefits plans to roll out a payroll service similar to the startup formerly known as ZenPayroll. In a weird twist, these cloud-based startups, once partners in offering each others services are now both planning to offer their own payroll and benefits services in one platform – in other words, Zenefits and Gusto are now competing for business.

“The size of this market and the speed of the disruption are likely to attract many new entrants.” Zenefits spokesperson Kenneth Baer told TechCrunch when asked about the competition. “We’re happy we started on this journey a little more than two-and-a-half years ago, and as the market leader and pioneer in the category, believe that no one can match our product and how easily and automatically Zenefits eliminates the administrative work behind running a small business.”

BuzzFeed pegged the secretive new Zenefits service as “Project Nutshot.” Zenefits would not comment on the addition of payroll officially, but we’ve also heard this is the plan and now would be a good time for the cloud-based HR startup to combine benefits and payroll processing.

The addition and subsequent rivalry is a punch in the gut to Zenefits – which partners (for now) with the newly named Gusto to offer payroll services to its clients. This partnership proved particularly helpful earlier this year when payroll giant ADP shut off access to Zenefits small business customers. Zenefits turned to then ZenPayroll for the needed payday processing.

But the addition of benefits and name change was always a part of the company roadmap, according to CEO Josh Reeves. Now is the right time to add benefits offerings, he told TechCrunch.

“We’ve always had these additional services in the plans, even the name. ZenPayroll is just something we came up with a week before YC Demo Day” Reeves said.

Whatever the origin story, the name change to Gusto helps clarify any potential confusion customers might have over the two “Zens.”

Gusto does not see itself in competition with Zenefits, though offerings are now mighty similar to each other. Instead, it says it made sense to include these additions based on customer demand. More than 86 percent of Gusto’s customers have asked for a single point solution to payroll and benefits.

“We are automating all of the complex enrollment and administration, so that a business owner can offer this important service to their employees, without any headache,” Reeves said.

Gusto has also been on a rapid growth tear after raising $60 million in April, building out a Denver office and adding more than 275 employees this year, up from a headcount of 60 at the beginning of the year. Compare that to Zenefits’ $583 million in funding and unicorn valuation status, plus, according to LinkedIn, more than 2,000 listed workers. Zenefits is clearly the cloud HR services company to beat.

Gusto told TechCrunch earlier that it plans to hire more than 1,000 employees in the coming years. It will need that to take on Zenefits. The startup already pulls in 20,000 businesses nationwide, with an estimated 5x increase, according to Gusto.

Reeves believes the field is still wide open. “Over 90 percent of our customers aren’t on the platform yet,” he said.

Gusto’s workers’ compensation offering is available nationwide today. Health benefits are available in California, with plans to roll out to more states in the coming months.

More TechCrunch

Meta’s Oversight Board has now extended its scope to include the company’s newest platform, Instagram Threads. Designed as an independent appeals board that hears cases and then makes precedent-setting content…

Meta’s Oversight Board takes its first Threads case

The company says it’s refocusing and prioritizing fewer initiatives that will have the biggest impact on customers and add value to the business.

SeekOut, a recruiting startup last valued at $1.2 billion, lays off 30% of its workforce

The U.K.’s self-proclaimed “world-leading” regulations for self-driving cars are now official, after the Automated Vehicles (AV) Act received royal assent — the final rubber stamp any legislation must go through…

UK’s autonomous vehicle legislation becomes law, paving the way for first driverless cars by 2026

ChatGPT, OpenAI’s text-generating AI chatbot, has taken the world by storm. What started as a tool to hyper-charge productivity through writing essays and code with short text prompts has evolved…

ChatGPT: Everything you need to know about the AI-powered chatbot

SoLo Funds CEO Travis Holoway: “Regulators seem driven by press releases when they should be motivated by true consumer protection and empowering equitable solutions.”

Fintech lender SoLo Funds is being sued again by the government over its lending practices

Hard tech startups generate a lot of buzz, but there’s a growing cohort of companies building digital tools squarely focused on making hard tech development faster, more efficient and —…

Rollup wants to be the hardware engineer’s workhorse

TechCrunch Disrupt 2024 is not just about groundbreaking innovations, insightful panels, and visionary speakers — it’s also about listening to YOU, the audience, and what you feel is top of…

Disrupt Audience Choice vote closes Friday

Google says the new SDK would help Google expand on its core mission of connecting the right audience to the right content at the right time.

Google is launching a new Android feature to drive users back into their installed apps

Jolla has taken the official wraps off the first version of its personal server-based AI assistant in the making. The reborn startup is building a privacy-focused AI device — aka…

Jolla debuts privacy-focused AI hardware

OpenAI is removing one of the voices used by ChatGPT after users found that it sounded similar to Scarlett Johansson, the company announced on Monday. The voice, called Sky, is…

OpenAI to remove ChatGPT’s Scarlett Johansson-like voice

The ChatGPT mobile app’s net revenue first jumped 22% on the day of the GPT-4o launch and continued to grow in the following days.

ChatGPT’s mobile app revenue saw its biggest spike yet following GPT-4o launch

Dating app maker Bumble has acquired Geneva, an online platform built around forming real-world groups and clubs. The company said that the deal is designed to help it expand its…

Bumble buys community building app Geneva to expand further into friendships

CyberArk — one of the army of larger security companies founded out of Israel — is acquiring Venafi, a specialist in machine identity, for $1.54 billion. 

CyberArk snaps up Venafi for $1.54B to ramp up in machine-to-machine security

Founder-market fit is one of the most crucial factors in a startup’s success, and operators (someone involved in the day-to-day operations of a startup) turned founders have an almost unfair advantage…

OpenseedVC, which backs operators in Africa and Europe starting their companies, reaches first close of $10M fund

A Singapore High Court has effectively approved Pine Labs’ request to shift its operations to India.

Pine Labs gets Singapore court approval to shift base to India

The AI Safety Institute, a U.K. body that aims to assess and address risks in AI platforms, has said it will open a second location in San Francisco. 

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

1 day ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine