Gusto, a startup with payroll and human resources software, said Wednesday that it has agreed to acquire Guideline, a startup specializing in corporate retirement plans. Terms of the deal weren’t disclosed.

Founded in 2011 and based in San Francisco, Gusto is among the world’s most valuable companies backed by venture capitalists, with a $9.3 billion valuation.

Gusto originally was named ZenPayroll and provided software that clients could use to run payroll for their employees. In 2015, the company rebranded to Gusto as it started selling health insurance and workers’ compensation.

Since 2016, Gusto has also offered 401(k) retirement plans through a partnership with Guideline. The relationship isn’t exclusive, though. Organizations can also set up Guideline plans through alternative payroll companies, including ADP, Block, Intuit, Paylocity, TriNet and privately held Rippling.

Those integrations won’t be going away after the acquisition closes, Guideline’s co-founder and CEO, Kevin Busque, said in an interview with CNBC.

Both Gusto and Guideline target small businesses.

Guideline, founded in 2015, has over 400 employees. In 2021, investors valued it at $1.15 billion. Gusto has more than 2,800 employees, with over $500 million in annualized revenue as of 2023. Guideline’s annualized revenue as of January totaled $140 million.

Gusto is in expansion mode, with plans to add 150,000 new clients this year.

“That’s a small number relative to the 6 million employers in the U.S., and we have work to do,” Josh Reeves, Gusto’s co-founder and CEO, told CNBC. Gusto’s customer count sits above 400,000 today, and the company focuses mainly on the U.S.

Gusto hopes to sell Guideline services to more of its clients after the deal closes, without worrying about revenue sharing. It will also pursue expansion in states that have passed mandates for employers to provide workers with retirement plans, Reeves said.

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