Gusto raises an extra round behind Faire as the unicorns react to the changing market.

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Gustonearly $10 billion HR technology unicorn expanded its 2021 Series E Funding Round. This funding event included $175 million in initial capital, a tranche of secondary shares, and a tender offer. EquityZen first noted a new capital increase from Gusto based on a review of public documents, which TechCrunch can confirm.

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The exact amount of capital raised by Gusto for the E-series expansion is a bit more opaque; however, it appears to be around the $55 million mark.

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The fact that Gusto is raising money as a continuation of his Series E, implying that he has added capital at a fixed valuation to his 2021 raise, should not be taken as a negative sign. In the startup investment market radically changed since the end of 2021., as the public value of technology companies has been on a negative trend for almost two quarters; companies that attracted last year are now facing a new reality regarding investor expectations.

With its expansion, Gusto now likely has enough cash to survive the current bottom and possibly go public once the IPO window opens. It is not clear how long this will wait, which makes it prudent to accept additional funding.

Gusto buys Remote Team to support more international recruitment

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The expansion, along with a secondary offering held by Gusto (also of an unclear size), was carried out to meet strong investor demand for the Series E, a source with knowledge of the matter told TechCrunch.

The company is not alone in increasing its latest fundraising. As TechCrunch recently reportedFaire also raised capital to its treasury as an additional round.

“In current market conditions, a flat extension of the raise round to 2021 should be considered a win.” Phil Haslett, co-founder and chief strategy officer of EquityZen, told TechCrunch. Haslett noted that more “flat” expansion could help companies avoid falling or falling in valuation, and that he expects to see more of these types of increases from “even the strongest companies.”

How many of these projectiles we will see is not clear, and it is also unclear how many we will be able to detect. Extensions are a bit quieter in terms of registration and in terms of PR; companies that announced huge rounds last year that they are extending in the current downturn may not want to broadcast that they are selling more shares at an outdated price. If this is true, they will make a mistake.

Why? One issue that later-stage private companies compare to their public counterparts is the cost of opacity. Simply put, public companies can be verified as solvent by potential clients. Private companies are harder to look inside. If the unicorn reveals that it has raised another portion of the funds at a fixed price this year, it will allay the market’s fears about staying viable in today’s turbulent market.

This fits in well with TechCrunch’s more general view that providing more information, rather than less, would be good not only for our ability to cover the startup market, but also for the companies themselves.

Flat new up. Once more.

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