HR software company Gusto raises $175 million

Gusto, a San Francisco-based payroll and HR software company, raised $175 million at a $9.5 billion valuation led by T. Rowe Price.

Why it matters: There is no better sign of a labor market roaring back than demand for payroll software.

The bottom line: "Part of Gusto's success will rely on its ability to maintain its swim lane of catering to small and medium businesses, says Scott Berg, an analyst at Needham & Co. The market for small and medium businesses is enormous, with more than 30 million in the U.S. Shopify built an almost $200 billion company providing these businesses with the tools to launch online businesses," writes Forbes' David Jeans.

• "Still, the HR and payroll software space is saturated with other public companies like Paychex and ADP, and Gusto's growth will require a gradual climb, Berg adds."