RegTech companies raised over $1.3bn in the first three months of the year
- Global RegTech investment grew almost five-fold between 2014 and 2018. An increase of 48.5% CAGR, in terms of capital invested, has seen funding grow from $923.4m in 2014 to $4,484.5m in 2018.
- Funding doubled between 2014 and 2017, before jumping to just under $4.5bn in 2018. Deal activity has been in an upward trend between 2014 and 2018, with 844 deals completed during the period. Annual deal activity has remained above 120 since 2014, reaching 164 transactions in 2018.
- Funding in 2018 was bolstered by large transactions with SenseTime, a facial recognition solution provider, raising over $2.2bn across three deals. When we exclude the $2.6bn that SenseTime raised across 2017 and 2018, global RegTech funding still grew from $1,467.6m to $2,264.5m during the period. This increase was partly due to there being as many as 11 transactions valued above $50m in 2018.
- Over $1.3bn was raised by RegTech companies globally in Q1 2019 across 60 transactions, which is nearly 30% of the total capital raised last year and more than the annual investments in full year 2014, 2015 and 2016.
- London-based DueDil, which provides access to information on private companies, raised $4.6m (£3.5m) of debt from Shawbrook Bank, Oak Investment Partners, Notion and Augmentum Capital, which was the only debt funding deal in the subsector last quarter. DueDil will use these funds to scale-up, supporting brand growth, and product and infrastructure development. The company currently supports more than 400 clients across the financial services, FinTech and technology sectors and is also looking to continue partnering with companies in Europe.
Funding in Q1 2019 was more than three times larger than the corresponding quarter last year
- Deal activity has remained above 40 transactions per quarter over the past five quarters, with the exception of Q3 2018, reaching a high of 60 deals in the first quarter of 2019.
- Funding more than trebled from $424.7m in Q1 2018 to over $1.3bn in Q1 2019, with deal activity climbing from 42 to 60 during the period.
- Investment in Q1 2019 was almost double that of the previous quarter, driven by larger deals, with more than a quarter of the transactions valued above $25m and nearly $850m raised in the ten largest deals of the quarter.
Almost two thirds of total funding in Q1 2019 has come from the top 10 deals
- Just under $850m was raised in the Top 10 global RegTech deals of Q1 2019, equal to 64.6% of the total capital raised in the subsector last quarter.
- Companies based in the United States dominated the top 10 deals with eight companies listed, followed by one company in France and another in the United Kingdom.
- Palo Alto-based Rubrik, provides GDPR-complaint cloud data management solutions that protect, manage, and monitor data across all environments. The company raised a $261m Series E round in January 2019, which was the largest RegTech deal in Q1 2019. Funding came from Bain Capital Ventures and previous investors Lightspeed Venture Partners, Greylock Partners, Khosla Ventures and IVP, valuing the company at $3.3bn.
- Shift Technology, a Paris-based fraud detection solution provider to the insurance industry, landed $60m in a Series C round led by Bessemer Venture Partners, bringing the company’s total investment to $100m. Shift now has more than 200 employees and serves clients across Europe, Asia and the Americas. The company is headquartered in Paris and has additional offices in Boston, Tokyo, Toronto, London, Hong Kong, Madrid, Singapore and Zurich.
- Featurespace provides behavioural analytics technology for risk management and fraud detection in financial services. The Cambridge, United Kingdom-based solution provider raised $33m (£25m) led by MissionOG and Insight Venture Partners, which was the largest RegTech deal in the United Kingdom last quarter. The funding will be used to support Featurespace’s international expansion and further development of its software capabilities.
Uptick in North American companies deal share boosted funding in Q1 2019
- There was a continued shift in the centre of gravity of global RegTech deal activity from North America to other regions of the world between 2014 and 2018. North America has dominated with 516 transactions completed during the period; but, the region saw its share of total deals drop from 67.2% in 2014 to just over half of all deals 2018.
- However, the proportion of deal activity involving RegTech companies based in North America rebounded, accounting for two thirds of transactions in Q1 2019, up from 51.2% last year. The share of deals in Europe grew from 23.6% to 34.8% between 2014 and 2018, before dropping to just over a fifth of deals in Q1 2019, with deal activity in the rest of the world (RoW) following a similar trend.
- The uptick in North American companies deal share boosted funding in Q1 2019, with 12 deals in the region valued above $25m compared to just 3 in Europe.
- Prior to 2016, the ‘RoW’ category was defined purely by Israel, Australasia and Asia, however South America entered the race, with three transactions completed each year since 2016. Idwall, an Onboarding Verification solution provider based in Sao Paulo, raised a $3m Series A round in Q1 2018.
- NsKnox, an Israeli cybersecurity firm providing payment fraud detection solutions, raised $15m in a Series A round which was the largest RegTech deal outside North America and Europe in Q1 2019. Funding was led by Viola Ventures and M12, Microsoft’s venture fund, and will enable NsKnox to expand its global customer base.
The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2019 FinTech Global
![Temenos (SIX: TEMN) today announced that National Bank of Iraq (NBI), part of the Capital Bank Group, has successfully gone live with Temenos core banking and payments. NBI, which has 27 branches across Iraq, offers a comprehensive range of services to individuals and businesses in the country. Since 2005, NBI has been majority owned by Capital Bank, one of the top financial institutions operating in the Jordanian and regional markets, with assets of approximately JOD 7.6 billion[1]. With this implementation, NBI moved from its legacy systems onto the same core banking platform as other entities in the Capital Bank Group. This will enable NBI to operate more efficiently and integrate seamlessly with other systems to develop new products faster and deliver an improved customer experience. Capital Bank Group is a long-standing Temenos customer with other entities in the Group including Capital Bank of Jordan, Bank Audi, Société Générale Bank Jordan and NBI Saudi Arabia, already on the Temenos platform. NBI also becomes the first part of the group to adopt Temenos Payments, which enabled the bank to process more than 100,000 transactions of incoming and outgoing domestic and international payments in the first 15 days of operation, with a 99% straight-through processing rate. The migration to the Temenos platform for core banking and payments at NBI was completed in under 12 months thanks to Temenos’ pre-configured banking and payments capabilities and APIs which reduced the need for complex customizations, as well as close collaboration between Temenos, NBI, Capital Bank and delivery partner ITSS. This success was recently recognized in the IBS Intelligence Innovation Awards, with Capital Bank winning ‘Best Implementation of Core Banking Services'. The implementation at NBI follows several other successful transformation projects with Temenos for Capital Bank in the last few years, including the launch of NBI’s branch operations in Saudi Arabia in just 45 days, as well as the integration of Bank Audi and the former Jordanian operations of Société Générale, each of which was achieved in under four months. Collectively, these projects helped Capital Bank to increase operational efficiency by more than 50% within three years, bringing significant cost savings and an improved customer experience. With faster, more accurate processing and immediate service requests, the bank has maintained high customer retention rates and a reputation for service excellence. Izzidin Abusalameh, Chief Operations Officer, Capital Bank Group, commented: “This achievement marks a significant milestone in our digital transformation journey and positions us as a leading player in the banking industry. We have seamlessly transitioned the National Bank of Iraq to a cutting-edge core banking system which will not only enhance operational efficiency but also support providing our customers with a superior digital banking experience. Our continued partnership with Temenos has not only provided us with an advanced technological platform but has also facilitated a culture of flexibility and adaptability, enabling us to execute our ambitious growth plans.” Lee Allcorn, Managing Director, Middle East & Africa, Temenos, said: “Congratulations to National Bank of Iraq and the Capital Bank team on this successful implementation that gives NBI business agility and the same modern technology platform and ability to deploy fast with pre-configured banking capabilities as the rest of the group. With Temenos, Capital Bank Group is future-ready, and we are proud to support them as they continue to innovate and leverage our platform to grow sustainably and enhance the banking experience for customers.”](https://fintech.global/wp-content/uploads/2024/04/rupixen-Q59HmzK38eQ-unsplash-2-100x70.jpg "Flutterwave teams up with Acquired.com to streamline outward remittances in EU and UK")
