Insurance software company Guidewire has agreed to acquire London-based AI underwriting startup Hyperexponential for $1.7 billion in cash, with an additional $400 million payable if certain revenue targets are met. The transaction, potentially worth $2.1 billion, is expected to close in early 2027 and will expand Guidewire’s AI capabilities for commercial insurance underwriting and pricing.
According to Guidewire’s October 27 announcement, the acquisition will bring Hyperexponential’s AI-powered underwriting platform into its insurance software business. The technology allows AI agents to work alongside insurance professionals to assess risks, analyze submissions and determine pricing for commercial and specialty insurance policies.
Hyperexponential Brings AI-Powered Insurance Underwriting Technology
Founded in 2017, Hyperexponential develops software designed to help insurers automate underwriting workflows and improve risk assessment. The company has raised nearly $90 million in funding, according to PitchBook, with investors including Andreessen Horowitz and Battery Ventures.
Hyperexponential says nearly 600 insurers across 40 countries use its technology, with a particularly strong presence among commercial and specialty insurance providers in the United Kingdom. Guidewire separately stated that Hyperexponential has supported underwriting decisions involving more than $75 billion in annual commercial property and casualty insurance premiums.
The startup’s platform supports activities including submission screening, risk assessment, pricing calculations and portfolio management. Its customers include Aviva, Allianz, Sompo, Beazley, Markel and Cincinnati Financial.
Hyperexponential is already part of Guidewire’s PartnerConnect Technology Alliance program, which allows external technology providers to integrate their products with Guidewire’s insurance software. Guidewire CEO Mike Rosenbaum said the acquisition would combine the companies’ technologies to support more complex underwriting decisions.
Guidewire Plans $1 Billion Loan to Finance Acquisition
Guidewire expects to finance the acquisition through $1 billion in new term loans and its existing cash reserves. Bank of America and Citibank have provided binding debt commitments to support the financing arrangement.
The acquisition is expected to close during the second quarter of Guidewire’s fiscal year 2027, which ends January 31, 2027. The agreement includes up to $400 million in additional payments tied to Hyperexponential achieving specified recurring revenue targets after the transaction closes.
Guidewire expects the acquisition to contribute at least 6.5 percentage points to its annual recurring revenue growth in fiscal 2027. From fiscal 2028, the company anticipates an additional contribution of at least 1.5 percentage points to its organic annual recurring revenue growth rate.
The company said the transaction would not affect its previously issued first-quarter fiscal 2027 guidance. Guidewire plans to provide updated financial projections during its next earnings call in December 2026.
Featured image credits: Magnific.com
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