While Reeves demurred on future acquisitions, Gusto’s focus on expanding to a comprehensive financial wellness platform for both employees and businesses would likely suggest that additional acquisitions may well be in the offing in the future.Party: Assistant Medical Officers/Native Medical Practitioners The company’s main bases of operation are in San Francisco, Denver and New York City, and the company has a growing contingent of remote workers, including the Ardius crew, who will remain based in LA. Gusto launched a program to help SMBs collect the government’s stimulus PPP loans. It “turns out in a health pandemic and in an economic crisis, things like payroll and accessing health care are quite important,” he said.
Reeves said the company grew its customer base 50% in its last fiscal year, which ended in April.
While the pandemic particularly hit SMBs, who often lacked the financial wherewithal of larger companies to survive the crisis, Gusto actually expanded its business as new companies sprouted up.
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“It’s great that there’s more awareness because it’s still under-utilized frankly.” He emphasized that Gusto would be able to offer a more vertically-integrated solution given its data and software than other competitors in the space. When it comes to R&D tax credits, “whatever creates more accessibility, we’re a fan of,” he said. Reeves was sanguine about the attention the space is garnering and the potential competition for Ardius. And this is just such a great example of where you can take the payroll data that we already have and in just a few clicks and in a matter of a few days, get access to really important cash flow for a business.” He noted that tax credits is “something that’s been on our roadmap for a long time.”įree money for startups? It’s possible with MainStreet’s platform for economic development incentives In a space as complicated as HR, “we want to be out there and be an advisor, not just a tool. Tomer London, co-founder and chief product officer, said that “we’ve been looking at this space for a long time because it kind of connects to one of our original product principles of building a product that is opinionated,” he said. “In some ways, a lot of stuff we’re doing - make payroll simpler, make healthcare simpler, make PPP and tax credits simpler - just make these things work the way they’re intended to work.” The company presumably could have built out such functionality, but he noted that “time to market” was a crucial point in making Ardius the company’s first acquisition. “We want to bring together technology, great service, make government simpler,” he said. Joshua Reeves, co-founder and CEO of Gusto, said that the acquisition falls in line with the company’s long-term focus on customers and simplicity. With this tie-up, the companies can simply do that automatically for Gusto’s extensive number of customers. Ardius in its current incarnation was designed to tap into a number of payroll data providers and extract that data and turn it into verifiable tax documents. The strategy here is simple: Most R&D credits require payroll documentation, data that is already stored in Gusto’s system of record.
Terms of the deal were not disclosed, and Ardius will run as an independent business with the entire team transitioning to Gusto. The Los Angeles-based company was founded by Joshua Lee in 2018, who previously had worked for more than a decade at accounting firm EY. Gusto, which started off with payroll for SMBs and has since expanded into employee on-boarding, insurance, benefits and other HR offerings, today announced that it is acquiring Ardius, a startup designed to automate tax compliance particularly around R&D tax credits. So a number of startups have been launched to solve that gap, and now, larger companies are entering the fray as well. Those credits, which is what helps tech giants keep their tax rates to near zero, are hard for smaller companies to receive because of extensive documentation requirements and potential audit costs.
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Free money from the government sounds like winning the lottery, but the reality is that most tech startups and even local retail businesses and restaurants can potentially qualify for tax credits related to research and development in the United States.
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