Key Global RegTech investment stats in H1 2024:
- Global RegTech deal numbers projected to drop by a third compared to the 795 deals completed last year
- Average deal value increased by 37% as investors focus on larger deals
- Claroty secured the biggest RegTech deal globally for the first half of the year with a $100m funding round
H1 2024 marked a challenging period for the global RegTech market, which experienced a sharp reduction in both financial backing and deal volumes. Only 246 deals were recorded in the first half of the year, marking a 45% decrease compared to the 444 deals completed in H1 2023. Funding also saw a notable drop, with RegTech companies raising $3.9bn in H1 2024, a 25% decrease from the $5.2bn raised in H1 2023. If this trend continues, the projected total for deal activity in 2024 would be around 492 deals, a 33% decrease from the 795 deals completed in 2023.
The average deal value in H1 2024 was approximately $15.9m, reflecting a 37% increase from the $11.6m average in H1 2023. This rise in average deal value indicates that while there has been a sharp decline in the number of deals, investors are focusing on larger, more substantial investments. This shift suggests that investors may be more selective, prioritising well-established RegTech companies with proven scalability and market traction amidst a more cautious investment climate.
Claroty, a leader in RegTech and the protection of cyber-physical systems, successfully completed a strategic growth financing round, securing $100m, making it the largest deal for H1 2024 globally. This significant financial boost comes from a group of prestigious investors, including Delta-v Capital leading the equity charge, complemented by contributions from AB Private Credit Investors at AllianceBernstein, Standard Investments, Toshiba Digital Solutions, SE Ventures, Rockwell Automation, and Silicon Valley Bank, a division of First Citizens Bank. The company specializes in safeguarding cyber-physical systems (CPS) across various sectors, including industrial, healthcare, commercial, and the public sector, while ensuring regulatory compliance through comprehensive risk management and monitoring solutions. By integrating advanced RegTech solutions into its offerings, Claroty helps organizations navigate complex regulatory landscapes, ensuring compliance and robust protection for the Extended Internet of Things (XIoT). The newly acquired funds are earmarked for scaling Claroty’s platform across key verticals and regions, enhancing product innovation, and fostering strategic partnerships, supporting the company’s efforts in expanding its reach within the public sector and critical infrastructure industries across the Americas, EMEA, and Asia-Pacific.
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