Regulatory Technology Funding Peaked in 2018

As we progress through Q1 of 2019, let’s look back on 2018 and analyze how funding in the regulatory technology (regtech) sector compares to previous years. The graphic below shows the total annual regtech funding amounts over time.

Regtech Funding Over Time
Regtech Funding Over Time

As the graphic demonstrates, 2018 was a record year for regtech funding at over $2B. It represents a 6% increase from the previous year’s funding. In addition, regtech funding grew at a CAGR of 42% over the past 5 years. Some of the largest funding events in 2018 include a $250M round for Cohesity, a $169M round for Netskope, and a $100M round for Assent Compliance.

To learn more about our complete regulatory technology dynamic report, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Regulatory Technology Investors With the Most Activity

The regulatory technology (regtech) industry has seen $10B in total all time funding. Let’s now examine the investors financing the regtech sector and identify the most active firms.

The graphic below highlights regtech investors based on the number of investments made in the sector. If an investor participates in two investment rounds in the same company (such as a Series A and Series B), that would qualify as two investments for this analysis.

Regtech Investors with Most Investments
Regtech Investors with Most Investments

As the graphic demonstrates, New Enterprise Associates has made the most investments in the regtech sector with 21 investments. Lightspeed Venture Partners and Accel follow with 20 investments each. Examples of companies that New Enterprise Associates has invested in include Forter, Fugue, DataVisor, and Tigera.

To learn more about our complete regulatory technology dynamic report, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Regulatory Technology Report Highlights  – Q4 2018

Here is our Q4 2018 summary report on the regulatory technology startup sector. The following report includes a sector overview and recent activity.

To learn more about our complete regulatory technology dynamic report, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Financial Crime Compliance and Network Security Compliance Lead Regtech Funding

As we’ve previously observed, regulatory technology (regtech) funding is on an upward trend in recent years. If we look closer at the category level, we notice two key takeaways:

  • The Financial Crime and Identity Compliance category leads the sector in Q3 funding
  • The Network Security Compliance category leads the sector in all-time funding

We’ll highlight these observations with some graphics and discussions below.

The Financial Crime and Identity Compliance Category Leads Regtech Q3 Funding

To start off, let’s review the amount of funding raised this quarter by each category within regulatory technology.

Regulatory Technology Latest Quarter Category Funding
Regulatory Technology Latest Quarter Category Funding

The above graphic highlights that the Financial Crime and Identity Compliance category leads the sector in Q3 funding with almost $90M. The Governance, Risk, and Compliance category follows in a close second with $83M in Q3 funding.

Financial Crime and Identity Compliance companies help financial institutions comply with regulations on identity related crimes. Their functions include client on-boarding, payment fraud, account takeover, and identity verification. Some example companies in this category are NetGuardians, Finomial, DueDil, and Feedzai.

Let’s now investigate how the regtech categories’ funding compare with each other historically.

The Network Security Compliance Category Leads the Sector in All-Time Funding

The graph below shows the all-time funding for different regulatory technology categories. The Q3 funding and growth rates of these categories are also highlighted.

Regulatory Technology Total Category Funding
Regulatory Technology Total Category Funding

As the bar graph indicates, the Network Security Compliance category leads regulatory technology in total funding at $1.5B. The Data and Privacy Compliance category follows in the second place with $1.2B in total funding.

Network Security Compliance companies help businesses comply with regulations around cyber-security risks. Some example companies in this category are Synack, HyTrust, AlgoSec, and SecurityScorecard.

In summary, the Financial Crime and Identity Compliance and Network Security Compliance categories are leading the sector in funding. Let’s see how the the rest of 2018 shapes up for regulatory technology!

To learn more about our complete regulatory technology report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Regulatory Technology Startup Highlights  – Q3 2018

Here is our Q3 2018 summary report on the regulatory technology startup sector. The following report includes a sector overview and recent activity.

To learn more about our complete regulatory technology report and research platform, visit us at www.venturescanner.com or contact info@venturescanner.com.

Introducing the Regulatory Technology Sector

We are excited to announce the launch of our regulatory technology (regtech) coverage!

Regtech companies help businesses automate or streamline activities around regulatory compliance. Examples include compliance for business operations, financial services, health services, and manufacturing.

This post will introduce and define the different categories that make up the regtech sector.

Regulatory Technology Map
Regulatory Technology Sector Map

The definitions of the regtech categories are as follows:

Business Regulation Compliance: Companies that help businesses comply with regulations affecting their operations. Examples include compliance for HR training, equity compensation, marketing, and document management.

Compliance Tracking and Reporting: Companies that help businesses track current, changing, and emerging regulations, as well as create reports according to those regulations. Examples include regulation databases and the sending of reports to the appropriate government agencies.

Data and Privacy Compliance: Companies that help businesses comply with regulations around the integrity and security of their data. Examples include data encryption, data recovery, cloud security, and prevention of unauthorized access.

Financial Crime and Identity Compliance: Companies that help financial institutions comply with regulations focused on identity related crimes. Examples include client on-boarding (Know Your Customer), payment fraud (Anti Money Laundering), account takeover, and identity verification.

Financial Services General Compliance: Companies that help financial institutions comply with regulations. Examples include trade monitoring, loan monitoring, data management, and financial adviser compliance tools.

Governance, Risk, and Compliance: Companies that implement Governance, Risk, and Compliance (GRC) processes to help businesses reliably achieve objectives, address uncertainty, and act with integrity. Examples include performing internal audit operations to ensure compliance with internal guidelines and regulations.

Health Services General Compliance: Companies that help health service institutions, such as hospitals and medical labs, comply with regulations. Examples include health data protection and pharmaceutical tracking solutions.

Network Security Compliance: Companies that help businesses comply with regulations around cyber-security risks. Examples include the mitigation of cyber-security risks and reviews of IT infrastructure and network devices.

Quality and Sustainability Compliance: Companies that help businesses comply with Quality Management Systems (QMS) and Environment, Health, and Safety (EHS) requirements. Examples include the implementation of manufacturing best practices and safety incident report tracking.

Tax Regulation Compliance: Companies that help businesses comply with national and international tax regulations. Examples include automatically calculating taxes and submitting payments on time in the correct formats.

To learn more about our complete regulatory technology report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.