Gusto Partners with Xero to Expand Embedded Payroll for Small Businesses

Gusto expands its reach to more small businesses through embedded payroll partnerships with platforms like Xero.

### Expanding Payroll Solutions: Gusto's Embedded Payroll Strategy for Small Businesses
* 🚀 Gusto is excited to support **over 400,000 small businesses**, recognizing the need for **efficient payroll solutions** within this sector.
* 📊 By creating the **Embedded Payroll industry**, Gusto allows platforms like Xero to launch their own payroll products powered by Gusto, similar to the **Stripe business model**.
* 🏢 The focus on small and medium-sized enterprises is crucial, especially given that there are **more dentist offices in the US than tech startups**, highlighting the **diverse needs of these businesses**.
* 🤝 Partnerships with companies like Chase Payment Solutions aim to provide modern payroll solutions that **save time and money** while **reducing filing errors**.
* 🌍 Gusto enables hiring both contractors and employees internationally, with a growing interest in **contractor hiring**, especially as **H-1B visa processes are streamlined**.
* 💼 The company remains focused on **enhancing customer experience and product offerings**, despite the competitive landscape with companies like Deel and Rippling.
* 💡 Gusto's leadership prioritizes **team building** and reinvesting free cash flow into **new products and services**, ensuring they meet the **evolving needs of their customers**.
* 🛠 The commitment to **continuous improvement and innovation** reflects Gusto's long-term vision in the payroll industry, aiming for a **public offering in the future**.

You're already a provider to an awful lot of small and medium-sized enterprises. Why further that even more? So we're thrilled to support and serve over 400,000 small businesses today. And one of the things we realized a couple of years ago is you have small

businesses that are going to use Gusto directly. There's a lot of small businesses out there served by existing platforms like Xero. And Xero focuses, like you mentioned, on accounting. A lot of these other platforms do not want to go build things like payroll

themselves. And so we created this industry called Embedded Payroll, which is basically the ability for folks like Xero, and that's what we're announcing today, to launch their own payroll products powered by Gusto. So more analogous to that Stripe-type

business model, and we're really excited about it because it's a way for us to reach more small businesses where they're at and are ultimately underserved at the moment. Because your startup space is a busy one, and there are plenty of payroll startups trying to be the be-all and end-all to everyone.

How are you finding that small and medium-sized enterprise space? Yes. I was underlining, folks. There are more dentist offices in the US than tech startups, so we really do obsess over, and Xero does as well, and a lot of our partners actually. We're thrilled to partner with a number of

companies, including Chase Payment Solutions, to basically bring modern, delightful payroll to where they're at in a more accessible, intuitive way. Saves them time, saves them money, prevents mistakes, filing issues. And we've built now, ten-plus years of infrastructure, processing over half a

trillion dollars of payroll to really earn that credibility and be who these partners want to choose when they're building out their own payroll products. Interestingly, I don't think a dentist office is going to be hiring many people abroad, but you've been trying to focus in on this, making it easier to hire

internationally. Now we're getting the news today that H-1Bs, for example, are going to be overhauled and streamlined, made easier by the current administration. How does that affect people's propensity to hiring abroad at this moment? So it really depends on the industry.

With Gusto, you do have the ability to hire both contractors and employees internationally. I'd say there's been more resonance on the contractor side, but again, many, many products that we're expanding into. International is just one.

We offer a lot of functionality around time tracking, 401(k), business insurance, all the different pain points. It's really hard still to run and start a small business, and our job is to make that easier. It's hard to run a startup even as

successful as yours. You haven't raised money since 2021, ultimately because, looking at your profitability, you don't need to. But what is the pressure on you to IPO, to have an exit? Is it, are you finding that the competitive moat when you're up against a

Deel or a Rippling, is getting harder, or is it fine? We welcome the competition. We want to be the best product in the market. We believe we are. We're also just only one decade into this journey. We talk about it being a multi-decade journey.

So at some point in the future, we will be public. Nothing to share there. But really, our obsession is on how do we give the best possible experience to those customers and do that through our actions, through the work we put in, and also through the partnerships we've

signed with folks like Xero and the talent we have. Like, when you're lying in bed and you've got something on your mind, does it tend to be talent acquisition? Is it about generative AI? What are you thinking most about? Mostly thinking about team building, and

as we, like you said, have free cash flow positive, a solid business model, real customer need that we're really delivering true value for. We're being very aggressive, reinvesting that capital, that free cash flow, into

building new products, building additional services for our customers to use. And so that usually means hiring, team building. And I'm spending a lot of time these days interviewing candidates.

Streamlining the Payrolls Process

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Gusto's partnership with Xero to launch embedded payroll services for small businesses.

Gusto already serves over 400,000 small businesses.

Many existing platforms like Xero focus on accounting and don't offer payroll services.

Gusto's embedded payroll allows platforms like Xero to offer payroll powered by Gusto, similar to Stripe's model.

This partnership helps Gusto reach more underserved small businesses.

Gusto's focus on small and medium-sized enterprises (SMEs) and their broader offerings.

Gusto emphasizes serving a wide range of SMEs beyond tech startups.

They aim to provide modern and accessible payroll solutions, saving businesses time and money.

Gusto has a robust infrastructure with over ten years of experience processing payroll.

Discussion on international hiring and Gusto's future plans.

Gusto supports international hiring of both contractors and employees.

Gusto offers various services like time tracking, 401(k), and business insurance.

Gusto is focused on long-term growth and plans to go public eventually.

Gusto is prioritizing team building and reinvesting profits into new products and services.