Gusto is seeking $50 million to go head-to-head with Zenefits

Gusto

Gusto (formerly ZenPayroll) is hoping to raise a new $50 million funding round according to a filing with the Securities and Exchange commission.

The filing states that Zenefits has raised $22.2 milion of its funding round. It appears that General Catalyst Partners is participating in this round, according to the filing, which lists the firm’s Hemant Taneja as part of the fundraising round.

Gusto started as a benefits platform and recently expanded into HR and benefits tools, an area where Zenefits is quickly growing after raising $500 million at a $4.5 billion valuation.

The company last raised $60 million in April at a $560 million post-money valuation. At the time of its last fundraising the company said it would focus on expansion, which includes growing its headcount.

During the rebranding period the company said it had added 275 employees this year.

Zenefits has been burning through money as it attempts to draw in more small business owners across the country.

Gusto is likely to experience the same type of growing pains as it expands. A need for quick growth mixed with a need to burn through cash to reach new customers is likely to further lead to questions about the entire model Gusto and Zenefits is chasing.

It’s still to be seen if Gusto’s newest $50 million funding round will give the company unicorn status.