Good morning, ! It’s Wednesday and we’re looking at how Thoma Bravo is scaling its property tech portfolio with a $1.3B move, why the $100B pet insurance market remains largely untouched, and how AI is transforming auto insurance from reactive to predictive. We also break down the impact of Moody’s U.S. credit downgrade and highlight Texas’ accelerating dominance in finance and insurance.

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DATA DIVE

$100B Treat: The Pet Insurance TAM Nobody’s Fetching

The U.S. pet insurance market is sitting on a potential $104 billion bone, and insurers haven’t even started chewing. With only 3.2% penetration, the 2023 insured base of 6.4M pets in the U.S. generates $6.4B in premiums—mostly dogs. If coverage grows alongside current CAGR trends (15.5%), the market could hit $26B by 2033, and that’s with no penetration gains. The kicker? 95M dogs and 83M cats in U.S. homes today. Capture them all and you’re looking at 13.6x market upside. It’s an underwritten gold rush hiding in plain sight. (Read or Listen to the Full Article)

TREND OF THE WEEK

Texas Math > National Values

Since 1Q2005, Texas' Finance & Insurance GDP has exploded +204.8%, outpacing the U.S. total at +135.5% and making the rest of the country (excluding Texas) look like it's running in slow motion (+131.4%). As of 3Q2024, the Lone Star State now claims nearly 7.5% of U.S. GDP in this sector—up from just 5%. In practical terms: Texas added the equivalent of a second Dallas to its financial economy while the rest of the map stayed mostly beige.

This surge is further bolstered by Texas' strong job growth in financial activities, which expanded over 5% in 2024, surpassing other sectors and indicating a robust labor market in finance and insurance.

IN PARTNERSHIP WITH PACASO

He’s already IPO’d once – this time’s different

Spencer Rascoff co-founded Zillow, scaling it into a $16B real estate giant. But everyday investors couldn’t invest until after the IPO, missing early gains.

"I wish we had done a round accessible to retail investors prior to Zillow's IPO," Spencer later said.

Now he’s doing just that. Spencer teamed up with fellow Zillow exec Austin Allison to launch Pacaso. Pacaso’s co-ownership marketplace is disrupting the $1.3T vacation home market. They’ve already surpassed $110M in gross profit and $1B in transactions.

They also recently reserved their Nasdaq ticker PCSO. But unlike Zillow, you can invest in Pacaso as a private company.

Until midnight PST tomorrow, Pacaso is accepting investors at $2.80/share.

Invest by midnight.

MARKET MOVERS

INSURTECH CORNER

Self-Driving Data, Meet Self-Running Ops

AI is doing more than writing underwriting scripts—it’s quietly becoming the backbone of auto insurance, automating processes from claims to risk assessment. The real kicker? Vehicles are now feeding insurers real-time data through telematics and IoT sensors. Think less paper pushing, more sensor-triggered pricing. With 87% of experts favoring automation, followed by chatbots and image recognition, the AI toolkit is clearly tuned for scale, not just speed. But the emerging frontier is self-gathering data—insurers aren’t just reacting to accidents; they’re monitoring distractions and fatigue before the crash. In this model, your driving habits aren’t private—they’re predictive. (More)

DEAL OF THE WEEK

Thoma Bravo’s Property Tech Double Down

Private equity heavyweight Thoma Bravo is turbocharging its property tech play. Nearmap, its Australia-based imaging and data platform, is acquiring Jacksonville-headquartered itel for $1.3B+, including debt, from GTCR.

Itel’s value proposition? A proprietary platform that slashes loss adjustment expenses in P&C by matching damaged materials with like-for-like replacements. The company serves 100 of the top U.S. carriers and has doubled revenue since 2021, per GTCR. That performance—and GTCR’s sharp timing, just a month after exiting Worldpay, highlights growing appetite for liquidity in a frozen IPO market.

Why it matters: The deal signals renewed dry powder deployment in insurance tech, even as many PE firms remain on the sidelines. For Nearmap, integrating itel could strengthen its end-to-end claims intelligence—an increasingly critical battleground as insurers seek both margin efficiency and better CX.

Linking claims assessment with geospatial imaging isn’t just logical—it’s a vertical consolidation bet on the future of property claims automation.(More)

MACROECONOMICS

Downgrade Dominoes

The U.S. just got a fiscal demotion. Moody`s downgraded America’s credit rating, citing a cocktail of ballooning deficits, weak governance, and a political class that treats debt ceilings like piñatas. Despite remaining a global safe haven, this symbolic downgrade isn’t just optics—it’s a mood setter. Inflation remains sticky, the Fed’s “high-for-longer” stance isn’t blinking, and GDP growth is more plateau than peak. Meanwhile, emerging markets could face a “sudden stop” if global capital flees for safer shores. The last time EMs got spooked, $35B walked out the door in 84 days. No wonder PE dealmakers are eyeing macro like hawks. (More)

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TWEET OF THE WEEK

"Success usually comes to those who are too busy to be looking for it."

Henry David Thoreau