Market Research Notes
Nearmap Acquires itel
Why does the acquisition make sense now?
Nearmap's acquisition of itel is an attempt to shorten the claims process and reduce fraud and perhaps more significantly to disrupt the property intelligence market. The quicker you can pay out claims by basing the veracity of the claim with "ground truth," i.e. recent image validation, then you've reduced the marginal cost of policy underwriting and you've captured one additional image for AI-crafted damage assessment models.
Why do the acquisition in the first place?
The competition in property intelligence is heating up, and specifically among it's own clients, like Cotality (formerly CoreLogic) which is more dominant in mortgage and proptech, but also insurance, and try to thwart similar partnerships such as Verisk and EagleView. It now appears more likely that Nearmap wants to take market share from Cotality's insurance practice. Nearmap's acquisition of Betterview in 2023 had already positioned it squarely against partners like Precisely, that have a substantial footprint in the insurance industry.
This is also a play toward going head to head with the Geospatial Insurance Consortium (GIC), and its partner, Vexcel Imaging, that offers gray-sky imagery to their subscribers at the time of catastrophic events. Vexcel clearly wants its differentiation to continue with UltaCam, a suite of very high spatial and spectral resolution digital cameras.
Nearmap is also now a private company having been acquired by Thoma Brava in 2022 with the clear intent of pivoting toward offering more geospatial services to the insurance industry.
More than a Data Company
Historically, Nearmap was an image acquisition company. As such it was merely a data company with an archive of imagery that if unused is a sunk cost. With the acquisitions of Betterview and itel, it is clear that Nearmap and its PE underwriters, Thoma Brava, wants to move the company deeper into insurance, where they have a footprint but also potentially into others like real estate.
In addition, the ability to capture rooftop measurements, while a much-needed capability, was becoming commoditized and table stakes as an image-based product. There are just so many pixels you can capture before you have just too many. However, it now has many such capabilities including automated feature extraction (e.g., pools, trampolines, sidewalks, vegetation, etc.), roof condition, and other property modifications.
Bottom Line
The entire move by Nearmap is to disrupt the current proptech market and become more than just a "data company." therefore positions the company to leverage artificial intelligence, geospatial data and image extraction to offer a more comprehensive solution to a market that has an increasing appetite for data. As a private company, it can now scale its operations without the pressure of quarterly earnings calls. It can continue to invest in technology and by the obvious intension of its Thoma Brava advisors, will continue on a course of looking at other acquisitions to scale where they see opportunity.