Guidewire Software Inc., which sells core systems to property and casualty insurers, agreed to acquire London-based Hyperexponential Ltd. for a base price of $1.7 billion in cash, betting that artificial intelligence will reshape how commercial insurance is priced and underwritten.
The deal, announced Tuesday at Guidewire’s Connections conference in Las Vegas, also includes up to $400 million in contingent payments tied to hyperexponential reaching specified recurring-revenue targets, putting the potential total near $2.1 billion.
Bringing pricing software in-house
Founded in 2017, hyperexponential makes AI-native underwriting and pricing software for commercial-lines insurers, reinsurers and managing general agents, and it already works with Guidewire as a technology partner. Guidewire said the platform has supported underwriting decisions on more than $75 billion of annual commercial premium and has a particularly strong position with commercial and specialty carriers in the U.K. The startup says nearly 600 insurers in 40 countries use its software.
Guidewire said the combination is meant to let software agents assess, price and recommend decisions alongside human underwriters and actuaries. It expects the acquisition to add at least 6.5 percentage points to its fiscal 2027 growth in annual recurring revenue on an inorganic basis and at least 1.5 points a year to organic ARR growth starting in fiscal 2028, while staying consistent with its long-term margin targets.
Funding and timing
Guidewire plans to pay with $1 billion of new term loan financing and existing cash. Bank of America and Citibank have provided a binding commitment for the loan. The company said the deal will not affect the first-quarter fiscal 2027 guidance it issued in September and that it will update its full-year outlook on its December earnings call.
The purchase is a sizable return for hyperexponential’s venture backers, which include Andreessen Horowitz and Battery Ventures. The startup had raised close to $90 million before the sale, according to venture data. The transaction is expected to close in the second quarter of Guidewire’s fiscal 2027.
