Key RegTech investment stats in Q3 2024:
- Global RegTech deal activity on the bounce back with increase of 34% QoQ
- Average deal value dropped to $8.7m as investors back smaller deals
- Vanta, a leading online security and compliance management platform, secured the largest RegTech deal globally for the quarter with a funding round of $150m
In Q3 2024, the global RegTech sector experienced declines in both deal activity and funding compared to the same quarter last year.
Only 137 deals were recorded in Q3 2024, representing a 27% decrease from the 189 deals completed in Q3 2023.
Funding saw an even more pronounced drop, with RegTech firms raising $1.2bn in Q3 2024—a sharp 63% decline from the $3.2bn raised in Q3 2023.
This combination of reduced deal activity and funding highlights a challenging environment for RegTech firms, with investors showing a clear pullback in capital commitments year-over-year.
When comparing Q2 to Q3 2024, there was an increase in deal volume as the number of transactions rose from 102 to 137 deals, marking a 34% QoQ increase.
However, total funding in Q3 2024 dropped by 41% from $2.0bn in Q2, suggesting that while more deals were made, the average deal size decreased significantly.
The average deal value in Q3 2024 was approximately $8.7m, a steep drop from the $19.8m average in Q2 2024 and significantly lower than the $16.9m average in Q3 2023.
This shift towards smaller deals suggests that investors are proceeding with greater caution, potentially reserving capital for only the most strategic investments, as the sector navigates increasing economic uncertainty and stricter regulatory scrutiny.
The trend indicates that the projected total for deal activity in 2024 would reach 548 deals, a 31% decrease from the 795 deals completed in 2023, while funding would close at $7.2bn, marking a 29% decline from the $10.1bn raised last year.
Vanta, a leading online security and compliance management platform, secured the largest US RegTech funding in Q3 2024 with a $150m investment led by Sequoia Capital, boosting its valuation to $2.45bn.
This strategic funding will enable Vanta to advance its AI-driven platform, pushing the boundaries of compliance automation while expanding into the UK and Australian markets.
With support from heavyweight backers like Goldman Sachs and JPMorgan Chase, this latest round brings Vanta’s total funding to $353m since its founding in 2018.
Serving over 8,000 clients, including companies like SmartRecruiters and ZoomInfo, Vanta’s platform accelerates compliance certification through process automation, replacing legacy compliance tools and positioning it as a pivotal player in the RegTech landscape.
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