By Leena Rao
Founded in 2001, Guidewire Software provides technology software to the property, casualty, and workers compensation insurance industry. The company offers a web-based claims system that supports various lines of personal, commercial, and workers’ compensation insurance; an enterprise application for coordinating, executing, and recording transactions; and a Web-based underwriting and policy administration system for personal and commercial insurance carriers. Basically, Guidewire, which is backed by U.S. Venture Partners, Bay Partners and Battery Ventures, automates the insurance industry.
While Guidewire’s product may not be as sexy as Pandora’s (NYSE:P) music radio service or LinkedIn’s (LNKD) professional social network, the enterprise company is actually making major revenue and profits. Guidewire brought in a healthy $144.7 million in revenue in 2010 and $121.5 million for the nine months ended April 30, 2011. Guidewire’s net income was $15.5 million in fiscal year 2010 and $33.5 million for the nine months ended April 30, 2011. And revenue and profit has grown consecutively over the past three years.
As of July, Guidewire had 101 customers, including big brands such as Nationwide Mutual Insurance Company. According to Gartner, insurance carriers spent $4 billion on software and $10.5 billion on IT services in 2010, so Guidewire is confident that they are part of a pretty fast-growing (and revenue-rich) industry.
For the most part, this year’s IPOs have been involving companies that offer consumer-focused products and services, as opposed to enterprise companies. Fusion-IO (NYSE:FIO), the developer of flash memory technology for companies, started trading in June. And Jive, which develops a social network and collaborative platform for the enterprise, just filed its S-1, and could begin trading at the end of the year at the earliest.