Guidewire Software’s initial public offering and introduction on the New York Stock Exchange today culminates over a decade of growth as one of the industry’s leading providers of core-system solutions for property & casualty insurance carriers.
“This really enhances our goals,” says Brian Desmond, Guidewire’s vice president, marketing, about the IPO. “Our goal is to be the leading vendor of core systems in p&c worldwide. This gives us the liquidity and the ability to meet that goal even faster.”
Marcus Ryu, CEO and co-founder, joined by members of Guidewire’s management team, celebrated the company’s first day of trading on the NYSE by ringing the Opening Bell.
“The capital and visibility it provides will accelerate our pursuit of the same mission we have had since our founding: enabling a critically important global industry to retire its legacy core systems and transform its operations,” says Ryu.
Guidewire announced the pricing of its initial public offering of 8.85 million shares of its common stock at a price of $13 per share. The shares began trading on the NYSE under the symbol “GWRE.”
Guidewire is a provider of core system software to the global p&c insurance industry. Guidewire InsuranceSuite, consisting of Guidewire PolicyCenter, Guidewire ClaimCenter and Guidewire BillingCenter spans the key functional areas in insurance—underwriting and policy administration, claims management, and billing.
Guidewire has enjoyed considerable momentum in the marketplace over the last decade and the executive leadership felt this was a good time to take the company public.
“It allows us to take these funds and invest them into continued growth across our business—improving our products as well as further scaling our sales and marketing efforts,” says Desmond.
Guidewire has customers in 12 countries and Desmond explains the company is looking to expand upon that.
“We felt this was an ideal opportunity to fund that growth,” says Desmond. “It’s about us continuing to expand and build upon our track record.”
Guidewire has over 100 customers across claims, policy management and billing, according to Desmond.
“[The IPO] allows us to improve our products and at a faster pace and it also allows us to increase our scale internationally at an even faster pace,” he says.
Asked whether the company is looking to grow through acquisition or via organic growth, Desmond responds: “At this point in time we’re talking about organic growth.”
Guidewire sees benefits for its customers—and potential customers—in going public.
“It gives even greater transparency into our financials and our operations,” says Desmond. “We feel this is an important criteria for our customers and prospective customers, particularly when you are looking at selecting mission-critical systems. We also believe passionately in continually improving our products and services. This gives us the liquidity to do that at an even faster pace.”
Donald Light, senior analyst for Celent believes Guidewire’s announcement is important for the insurance software sector and for insurers that buy new software.
He feels the IPO will provide access to public equity markets and working capital—as well as funding additional internal development in its products and technology.
“As Guidewire is now a publicly traded company, its customers and prospects will have more visibility into its financial status,” says Light.
For the insurance software industry, the IPO highlights the importance of modern software as an enabler of growth and competitive advantage for property/casualty insurers facing a tough global economic environment, explains Light.
A MarketWatch article quoted Scott Sweet, senior managing partner and principal researcher of IPO Boutique as saying investor interest in Guidewire was robust. Sweet described the interest among investors toward the Guidewire offering as an “absolute blowout.”
Ryu says he appreciates the “enormous trust our customers have placed in us to get to this point and pledge that we will continue to prove that trust is well-placed."
Desmond adds, “We started this company close to 11 years ago and we’re deeply thankful to our customers that picked us, both in the early days and throughout the years. They put their faith in our company so today is a celebration for the Guidewire community.”