European RegTech deals climb in Q1

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With the financial sector rapidly evolving as well as the companies inside it, the need to have a thorough understanding of Know Your Business (KYB) is more key than ever.

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Research highlight

European RegTech deal activity defies trends increasing 56% in Q1 2023 YoY

?Key European RegTech investment stats in Q1 2023:?

• European RegTech deal activity reached 47 deals in Q1 2023, a 56% increase from Q1 2022
• Combined capital raised by European RegTech companies in Q1 2023 reached $324m, a 2% drop YoY
• The UK remained the most active RegTech country in Europe during Q1 2023

?European RegTech had a positive start to the year with both investment and deal activity increasing. European RegTech investment in Q1 2023 increased 2% YoY to $324m. European RegTech deal activity saw a trend defying increase of 20% to 47 deals in Q1 2023 from the same period the previous year.

Ledger, which provides security and infrastructure solutions to critical digital assets, was the largest RegTech deal in Q1 2023 raising $108m to extend their Series C funding round. The extension round maintained the company’s valuation at €1.3 Billion. The company intends to use the funds to further its global ambitions and accelerate its drive to support blockchain innovation. Led by Pascal Gauthier, Chairman and CEO, Ledger is a global platform for digital assets and Web3. With more than 6M devices sold to consumers in 200 countries and 10+ languages, 100+ financial institutions and brands as customers, 20 % of the world’s crypto assets are secured, plus services supporting trading, buying, spending, earning, and NFTs.

The UK was the most active RegTech country in Q1 2023, with companies headquartered in Britain announcing 18 transactions during the quarter, a 38% share of deals. Germany was the second most active RegTech country in Q1 2023 with seven deals, a 15% share of deals and France was the third most active with five deals.

In December 2022, the European Commission announced the selection of four consortiums, made up of public and private organizations from various parts of Europe, to conduct large-scale pilot projects for the upcoming EU Digital Identity Wallet. The Commission had issued a call for proposals in February of the same year. The main purpose of these pilot projects is to test the deployment of the EU Digital Identity Wallet in priority use cases, such as banking and eGovernment services, and across national borders. The successful implementation of these projects will support eIDAS 2, the EU regulation that requires all member states to provide a digital identity wallet to any citizen who desires one.

RegTech news

• Debunking 8 assumptions around QA in financial services?- Quality assurance (QA) is an important process for financial services. It ensures products and services are compliant and that they meet customer demands. Read the full story?here.
• How was the first year of EU Taxonomy reporting??-?As firms finish their first annual EU Taxonomy reporting procedures, Position Green taxonomy expert Tony Christensen has looked back on some of the pain points and lessons to be learned. Read the full story?here.
• What are some of the key AML red flags??- When observing potential cases of money laundering, it is important that businesses understand the key red flags to watch out for. Read the full story?here.

Regulation news

• Are enough FTSE 100 firms publishing credible decarbonisation plans??- A recent study by EY has found that 95% of companies in the FTSE 100 committing to net zero by 2050 have not published ‘credible’ decarbonisation plans.?Read the full story?here.
• Bank of England begins building out its CBDC team?- The Bank of England (BofE) has begun hiring workers to develop its digital currency, according to?PYMNTS.?Read the full story?here.
• FCA set to lead first ever Greenwashing TechSprint - The?FCA?will be among the 13 international regulators so far taking part in the first-ever Greenwashing TechSprint that will launch on 5 June this year.?Read the full story?here.

RegTech Deal news

• Digital identity network ID.me raises $132m and names new CFO?-?Secure digital identity network?ID.me?has raised $132m in its Series D funding round and appointed Samantha Greenberg as its new chief financial officer. Read the full story?here.
• Communications surveillance firm VoxSmart secures $12m?-?VoxSmart, a leader in communications surveillance and financial AI solutions, has raised a further $12m in a recent funding round. Read the full story?here.
• Governance SaaS platform Kuberno scores ￡3.5m?-?Kuberno, a global legal entity SaaS provider for corporate secretaries, legal teams, and governance professionals, has raised ￡3.5m for its Series A.?Read the full story?here.

CyberTech news

• ACA releases ACA Vantage for Cyber to help private market firms monitor portfolio company security?-?ACA Group, a governance, risk and compliance (GRC) advisor, has released ACA Vantage for Cyber to help private markets firms discover, prevent and remediate critical cyber vulnerabilities across their portfolio. Read the full story?here.
• Australian firm Fivecast secures $20m in Series A?-?Fivecast, an open-source intelligence software firm, has closed its Series A funding round and has raised $20m.?Read the full story?here.
• External threat landscape management firm Cyfirma lands $5.5m-?Cyfirma, an external threat landscape management company, has raised a pre-Series B round of funding valued at $5.5m. Read the full story?here.

Other RegTech news

• Pesawise teams with Flagright to strengthen payment solution offering?-?Pesawise, a Kenyan FinTech focused on providing seamless and secure payment solutions, will partner with Flagright to boost its payment offering.?Read the full story?here.
• CLM developer SimpliContract closes pre-Series A on $3.5m?-?Contract lifecycle management (CLM) SaaS platform?SimpliContract?has closed its pre-Series A round on $3.5m, as it looks to expand in the US and Europe.?Read the full story?here.
• ChatGPT can return to Italy if OpenAI complies with privacy rules, states watchdog -?ChatGPT could be allowed to return to Italy if OpenAi, its maker, complies with privacy rules underlined by the Italian data protection authority Garante.?Read the full story?here.