Financial services firm Moody’s announced Monday that it has agreed to buy Cape Analytics, a geospatial AI startup, for an undisclosed sum.
The deal, which is expected to close in Q1, subject to customary closing conditions, will give Moody’s access to Cape Town’s geospatial AI analytics technology for underwriting. With the technology, Moody’s plans to create a property database that can deliver “address-specific” risk information to its insurance clients, said Moody’s CEO Rob Fauber.
“By combining … our risk models with AI-powered property risk intelligence, we will provide our clients with the most advanced property risk analytics available in the industry,” Fauber said in a statement, “improving information and decision-making across the insurance industry. life cycle.”
Cape Town’s exit comes as the insurance industry ramps up its adoption of AI and predictive analytics technology. A 2024 survey by Conning, an insurance asset manager, found that 77% of insurers are in some stage of using AI, which is a 16 percentage point increase from the previous year. According to one estimate, the global AI in insurance market will be worth 79.86 billion dollars by 2032.
Suat Gedikli and Ryan Kottensette founded Mountain View, California-based Cape in 2014. Kottensette was previously a senior engineer at BMW, then principal at Khosla, and Gedikli was a research engineer at robotics tech incubator Willow Garage.
Cape allows insurance carriers to improve their underwriting process by enabling them to use AI and geospatial imagery to inspect properties without having to send someone out to inspect them. In collaboration with geospatial image providers, Cape Town acquires satellite images, then uses internal algorithms to extract structured data, such as whether the property has solar panels and the shape of the roof, and turns it into a structured building information database.
Kottensette says nearly half of the top property insurance companies, as well as some of the world’s leading banks, use Cape Town to inform their pricing and underwriting strategies.
Cape was able to raise $75 million from investors including Formation 8, Pivot Investment Partners, and State Farm Ventures before its exit, and the company is cash-strapped and profitable, according to Kottensette.
Kottensette said in a blog post that he believes Moody’s, combined with Cape, can bring a “much deeper set” of underwriting workflow solutions to carriers and “allow a more comprehensive view” of risk. Moody’s clients can expect more in-depth, location-specific data, more Kottensette, including construction factors, average annual loss estimates, ratings, and more.
“Moody’s access to broad, highly diverse knowledge enables us to continue to expand and deepen Cape’s solutions by including additional, orthogonal, risk-related input data,” Kottensette wrote. “Moody’s global rating can accelerate our growth in international markets, [and its] history with financial stakeholders beyond insurance carriers may accelerate the adoption of Cape Town’s offerings within the mortgage ecosystem and that of other financial stakeholders.”
Cape Town is Moody’s first acquisition in 2025 – and its 23rd acquisition to date, according to financial website Tracxn. Cape adds to Moody’s property insurance related mergers and acquisitions, including Praedicat, a casualty insurance actuarial provider, and RMS, a natural disaster and natural disaster modeling firm.