How AI is transforming AML practices & No $100m+ RegTech deals in Europe in 24'

How artificial intelligence is transforming AML practices in FinTech

Financial crime has evolved significantly in our increasingly digital world. Money laundering, terrorist financing, and fraud are more sophisticated than ever, posing serious challenges for financial institutions mandated to stay compliant.

Read the full story here.

Research highlight

European RegTech market recorded zero deals over $100m as deal activity halved in 2024

Key European RegTech investment stats in 2024

? European RegTech deal activity halved in 2024 YoY

? European RegTech market recorded zero deals over $100m as investors grew cautious

? Kaizen, a leading provider of regulatory compliance solutions for global financial institutions, secured one of Europe’s biggest RegTech deals of the year with a $54.1m minority investment from Guidepost Growth Equity

European RegTech deal activity halved in 2024 YoY

In 2024, the European RegTech market faced a steep contraction in both total funding and deal volume compared to prior years.

Total funding amounted to $724m across 111 deals, reflecting a significant 53% drop from the $1.5bn raised in 2023 and a 34% decrease from the $1.1bn recorded in 2020.

Deal volume followed a similar downward trend, falling 50% from the 220 funding rounds closed in 2023 and 54% from the 241 deals seen in 2020.

These declines highlight a challenging environment for RegTech investment in Europe, marked by cautious investor sentiment and reduced market activity.

European RegTech market recorded zero deals over $100m as investors grew cautious

A notable shift in 2024 was the complete absence of deals valued at $100m or more.

In comparison, such high-value transactions contributed $615m in 2023 and $300m in 2020.

All funding in 2024 came exclusively from deals under $100m, which totalled $724m.

This represents a 21% decline from the $913m raised by sub-$100m deals in 2023 and an 8% decrease compared to the $794m raised in 2020.

The average deal size in 2024 rose slightly to $6.5m, up 3% from $6.4m in 2023 and 15% higher than $4.5m in 2020.

This increase in average deal size reflects a more concentrated allocation of funding, emphasising a selective approach to investments in the European RegTech market.

Kaizen, a leading provider of regulatory compliance solutions for global financial institutions, had secured one of Europe’s biggest RegTech deals of the year with a $54.1m minority investment from Guidepost Growth Equity

This marks Kaizen’s first external funding since its founding in 2013 and will be used to accelerate product development, expand in North America, and enhance its award-winning ReportShield platform.

With a proven ability to detect 100% of errors at scale across global regulatory frameworks like MiFID, EMIR, and SEC, Kaizen has diversified into shareholding disclosures, regulatory rules management, and trade surveillance, solidifying its position as a trusted compliance partner for top-tier financial institutions worldwide.

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