RegTech companies raised $9.2bn across 222 deals in the first half of the year driven by large transactions over $100m
- Global RegTech investment between 2017 and 2020 increased exponentially as investors increasingly backed companies looking to solve and bring efficiency to outdated compliance processes. Additionally, new regulations such as MiFID II and GDPR, introduced in 2018, opened up new markets for technology solutions helping financial institutions comply with the complex rules. Total funding grew at a CAGR of 74.7% over the period from 1.5bn to nearly $8.0bn at the end of last year.
- The coronavirus pandemic only increased investors’ appetite for deals in the sector as the social distancing measures and working from home arrangements forced financial services firms to employ surveillance software and digital solutions to monitor digital risks and remote staff’s conduct. Funding hit $9.2bn in the first three months of 2021, already surpassing the total capital invested in the whole of last year. The massive investment growth was mainly driven by 30 deals valued at $100m or more, compared to just 13 such transactions recorded in H1 2020
- If we look beyond the eye-watering funding figures, the RegTech sector still saw strong levels of deal activity with 222 transactions completed in the opening six months of 2021. That’s a 57.4% growth compared to H1 last year.
Transmit Security raised the largest Series A RegTech round to date in Q2 2021
- The RegTech sector continued to heat up in the second quarter as companies raised $4.9bn worth of funding. That’s 13.9% higher that the total capital raised during the first three months of 2021 when the sector recorded $4.3bn in investment. The record figures continue to be driven by late stage deals as established RegTechs raise capital to fuel international expansion and tackle new challenges brought by the pandemic. Eight of the transaction on the top ten list in Q2 2021 are Series D or beyond.
- However, the largest deal of the period was completed by Transmit Security, a passwordless identity and risk management solution provider, which raised the largest Series A transaction to date in the sector. The company received $543m at $2.2bn pre-money valuation in a round led by Insight Partners and General Atlantic. The fresh funds will help the company accelerate its mission to help the world go passwordless by expanding into other regions and verticals.
- The biggest deal outside the United States was completed by Trulioo, a global identity verification platform, which closed a $394m Series D round led by TCV. The deal valued the company at $1.75bn and the capital will be used to complete the company’s journey to becoming an end-to-end identity platform. Trulioo already offers identity verification for five billion consumers and 330 million business entities across the globe and over the past year the company has expanded into new verticals while establishing a presence in Dublin, Austin and San Diego.
The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2021 FinTech Global