More than one in eight RegTech deals globally were raised outside of North America and Europe in 2019

There have been almost 950 RegTech deals completed globally between 2015 and 2019, with over $17.1bn raised across these transactions.

North American companies have dominated the RegTech landscape during the period having captured 59.8% of deals. However, between 2015 and 2018 there was a shift in RegTech deal activity away from North America towards other regions of the world. In 2018, Europe accounted for 34.8% of deals, an increase of 8.6 percentage points (pp) from 2015, while North America’s deal share dropped by 14.5pp from 65.7% in 2015 to 51.2% in 2018. This comes as investors prepared for Eurocentric regulations such as GDPR and MiFID II which were enforced in May and January 2018, respectively.

However, in 2019 this trend reversed with North America’s deal share rebounding to 63.4%, back to the level it was at in 2016. This bounce back was driven by an increase in Cybersecurity deals in the region, accounting for 41.8% of deals in 2019, as investors look to get ahead of GDPR-like regulations reaching North America.

Deal activity in other regions of the world peaked in 2018 with 14.0% of deals being raised here. This slightly dropped in 2019 to 12.6%, but this still represents a 4.5pp increase on 2015’s proportion. It is to be expected that RegTech investment would gravitate towards large financial centres such as the US or London, rather than emerging markets, given the financial use case of RegTech solutions. However, as penetration of financial services increases in other regions of the world, the importance of compliance increases and hence there is a market for more RegTech investment.


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