Guidewire Grows Stronger Through Acquisitions

Earlier last year, Guidewire had also completed the acquisition of ISCS, a cloud computing technology company that focuses on policy administration, underwriting, claims, billing, business intelligence, reinsurance and mobile products. Prior to the acquisition, it was trending at annual revenue run rates of more than $40 million and was growing 20% annually, The deal was estimated to be valued at $160 million.

Meanwhile, Guidewire continues to improve its product offering. Earlier this year, it announced the latest release of its flagship platform. The latest release includes several enhancements to its core data and digital and all-in-one product families. It will also feature more than 80 ready-for-Guidewire validated accelerators. It also announced the availability of its first P&C insurance CRM applications for Salesforce Financial Services Cloud. The integration will allow P&C insurers to unify their core digital and CRM strategies in a simpler and faster way.

Guidewire is not the only player in its field. There are several other private players in the industry as well including Carpe Data, Black Swan Data, and Data Science. But the company is doing well, given the awards it keeps winning. Last quarter, it won two awards for policy administration by industry analyst Celent.

The market is pleased with Guidewire’s performance. Its stock is trading at $91.34 with a market capitalization of $7.3 billion. It had climbed a 52-week high of $96.19 earlier last month. It has been steadily climbing from its 52-week low of $67.82 in June last year. The stock has grown significantly since its 2012 listing price of $13 when it raised $115 million. Prior to listing, Guidewire had raised an undisclosed amount from investors including US Ventures, Bay Partners, and Battery Partners.

Questions for the Board

Guidewire has clearly identified the opportunity for growth through acquisitions. I would like to know what other segments is it focusing on through these acquisitions. By adding analytics to its capabilities, it is widening its reach within its existing clientele. What other such opportunities does Guidewire want to leverage?

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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