How RegTech is helping SMEs thrive & Global RegTech funding climbs 5% in Q2

How is RegTech helping SMEs with their regulatory challenges?

SMEs are often the lifeblood of an economy, and being able to protect against future challenges – whether physical or digital – are always top of mind. In this fight, what role does RegTech play in abating these fears?

Read the full story here .

Research highlight

Global RegTech funding experienced a steady increase of 5% in Q2 as deals over $100m grew

Key RegTech investment stats in Q2 2024:

? Global RegTech funding recorded a second consecutive quarterly growth during Q2 as investments grew by 5%

? Deals over $100m increased by 44% from Q1 2024, which brought the average deal value for the quarter to $19.6m

? KarmaCheck secured the largest deal for the quarter via its Series B funding with $45m

In Q2 2024, the global RegTech sector experienced a notable decline in both deal activity and funding compared to the same period in 2023. A total of 102 transactions were completed during the quarter, representing a 54% drop compared to the 222 deals recorded in Q2 2023, and a further 29% decline from the 144 deals in Q1 2024. However, despite the reduction in deal numbers, funding increased to $2bn in Q2 2024, up 5% from $1.9bn in Q1 2024, though still 33% lower than the $3bn raised in Q2 2023.

If this trend continues, the projected number of deals for 2024 would be around 492 deals, a 33% decline from the 738 deals completed in 2023. In terms of funding, the year could close with approximately $7.8bn, a 35% decline from the $12bn raised in 2023, but showing relative stability compared to recent quarters. Deals under $100m in Q2 2024 accounted for $890m, down 37.7% from $1.4bn in Q2 2023. Larger deals over $100m totalled $1.1bn in Q2 2024, representing a 29% drop from $1.6bn in Q2 2023 but a healthy 44% recovery from $782m in Q1 2024. The average deal value in Q2 2024 stood at $19.6m, up from $13.5m in Q2 2023, reflecting fewer but higher-value transactions.

KarmaCheck, a trailblazer in technology-driven background checks and credentialing, secured $45m in a Series B funding round, the largest deal during Q2, spearheaded by Parameter Ventures, with additional backing from PruVen Capital, Velvet Sea Ventures, GC1 Ventures, and NextView Ventures. KarmaCheck is renowned for its innovative approach to simplifying and enhancing the background check process. Founded in 2019 by Eric Ly, a LinkedIn co-founder, the company has consistently aimed to dismantle the barriers obstructing the path between talent and professional opportunities. Through its state-of-the-art technology platform, KarmaCheck has redefined the standards for background checks and credentialing services. The fresh capital will be utilised to further refine KarmaCheck’s proprietary technology, scale up service levels to accommodate more customers and candidates, and venture into new industry verticals.

RegTech news

• Is AI helping improve the risk assessment process? - Whilst its existence in the industry has been known for countless years, the impact and use of AI in financial services has ramped up massively over the past three years. In the area of risk assessments, how has AI changed this process? Read the full story here.
• Regnology launches Granular Data model to transform regulatory reporting - Regnology has launched Regnology Granular Data (RGD), a groundbreaking integrated data model designed to redefine regulatory reporting. Read the full story here .
• The rise of deep fakes: Understanding the technology and its implications - Deep fakes, or artificially generated media, represent a growing concern due to their increasing sophistication. Read the full story here .

Regulation news

• Meta hit with $102m EU fine over password security breach -?Meta has been fined $102m by the Irish DPC for not encrypting user passwords, marking another penalty for the company under the EU’s privacy regulations. Read the full story here .
• Bank Negara Malaysia innovates with NFP to tackle financial scams - Bank Negara Malaysia, PayNet and several financial institutions have teamed up to launch the National Financial Portal (NFP), a cutting-edge platform designed to bolster the NRSC’s operations. Read the full story here .
• IFRS Foundation releases guide for voluntary sustainability disclosures - The IFRS Foundation has launched a guide titled “Voluntarily applying ISSB Standards—A Guide for Preparers,” announced during New York Climate Week. Read the full story here .

RegTech Deal news

• Torq bags $70m in Series C to propel Gen AI in security operations - Torq, a pioneering leader in AI-driven security hyperautomation, has successfully closed its Series C funding round, amassing $70m. Read the full story here .
• Atlas Metrics secures €12.2m in Series A to transform ESG compliance in Europe - Atlas Metrics, a trailblazer in ESG compliance solutions, has recently closed a Series A funding round, amassing €12.2m. Read the full story here .
• Dragos acquires Network Perception to boost OT network visibility - Dragos, a pioneer in cybersecurity for OT environments, has acquired Network Perception, known for its NP-View, a top network visualization tool for OT networks. Read the full story here .

CyberTech news

• Rising cybersecurity investments in Nordics amid increasing threats - The recently released Nordic Cyber Resilience Report 2024 highlights a growing concern in Finland, Norway, and Sweden over cybersecurity threats, with a significant 54% of surveyed organizations having experienced at least one severe cyberattack in the past year. Read the full story here .
• Apono secures $15.5m Series A funding to innovate cloud access security - Apono has announced a significant boost in its growth trajectory with a successful Series A funding round that garnered $15.5m. Read the full story here .
• CyberArk enhances machine identity security with acquisition of Venafi - CyberArk, an identity security firm, and Venafi, a leader in machine identity management, have concluded their acquisition process. Read the full story here .

Other RegTech news

• Optimizing compliance with AI: A deep dive into 4CRisk’s Compliance Map - In the ever-evolving world of compliance and risk management, staying ahead of regulatory changes is a formidable challenge. Read the full story here .
• Key strategies to maximize efficiency in AML case management - In today’s rapidly evolving FinTech landscape, the capacity to effectively manage a growing volume of financial transactions is paramount, particularly with the rise in digital transactions. Read the full story here .
• Enhancing ESG compliance: A strategic roadmap for European businesses - As the CSRD gears up for a full roll-out, businesses across Europe are bracing for the introduction of mandatory ESRS by 2025. Read the full story here.