Regulatory Technology Report Highlights – Q2 2019

Here is our Q2 2019 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.

Regulatory Technology Funding in 2019 Projected To Exceed 2018

How is the funding environment shaping up for regulatory technology in 2019? As we pass the mid-year mark, let’s see how the year-to-date metrics compare to the historical trends. The graph below shows regtech total funding by year, stacked by quarters.

Regulatory Technology Funding Over Time
Regulatory Technology Funding Over Time

As the graphic demonstrates, regtech has amassed $2.9B through Q1 and Q2 of this year. This amount represents 138% of the total funding in 2018, and 322% of the funding through Q2 in 2018. The top three funding events in Q2 2019 include a $500M round into Kaseya, a $300M round into KnowBe4, and a $130M round into Druva.

A straight-line projection of the completed funding this year would result in $5.9B, which is 275% of the total 2018 funding. By the same token, a weighted quarterly average projection of 2019 funding would result in $6.9B, which exceeds the total 2018 funding by a whopping 222%. Therefore, based on the mid-year data, regtech funding in 2019 is projected to be significantly higher than the funding in 2018.

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 Investor Activity Showing Overall Growth

How has investor appetite in regulatory technology evolved throughout the years? In this blog post we examine the total investments by year into this sector to help answer that question. The graph below shows the total number of investors in all deals stacked by quarters.

Regulatory Technology Investors Over Time
Regulatory Technology Investors Over Time

As the graphic demonstrates, investor activity in regtech has been on a generally upward trend in recent years. The 5-Year CAGR of regtech investor activity from 2013 to 2018 is 19%. In addition, the sector has seen a total of 247 investors in all deals through Q2 of this year. This represents 75% of the total investor activity in 2018, and 176% of the investor activity through Q2 in 2018. Taking all these data points together, we can see that investor appetite for regtech deals has been steadily increasing in recent years, despite the slight drop in 2018.

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 Sector Overview – Q1 2019

This blog post examines the different components of the regulatory technology (regtech) ecosystem. We will illustrate what the categories of innovation are and which categories have the most companies. We will also compare the categories in terms of their funding and maturity.

Financial Crime Compliance Is The Largest Regulatory Technology Category

Let’s start off by looking at the Sector Map. We have classified 569 regtech startups into 10 categories. They have raised $12B from 987 investors. The Sector Map highlights the number of companies in each category. It also shows a random sampling of companies in each category.

Regulatory Technology Logo Map
Regulatory Technology Logo Map

We see that Financial Crime Compliance is the largest category with 118 companies. Financial Crime 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 look at our Innovation Quadrant to find out the funding and maturity of these categories in relation to one another.

The Pioneers Quadrant Has the Most Regulatory Technology Categories

Our Innovation Quadrant divides the regtech categories into four different quadrants.

Regulatory Technology Innovation Quadrant
Regulatory Technology Innovation Quadrant

We see that the Pioneers quadrant has the most number of regulatory technology categories at 5, accounting for 50% of all regulatory technology categories. The Quality Compliance category has the highest average age, and the Network Compliance category has the highest average funding. On the other hand, the Compliance Tracking category is low on both average funding and age.

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