California remains top spot for US RegTech in 2024 & Why 2024 was a transformative year for Arctic Intelligence

Top Story of the Week

Why 2024 was a transformative year for Arctic Intelligence - Founded in 2015, Arctic Intelligence is a global RegTech company that has developed enterprise risk assessment software enabling regulated businesses to better assess, document and manage their financial crime risks.

Read the full story here.

Research highlight

Californian companies secured 31% of US RegTech deals as it dominated the marketplace in 2024

United States RegTech investment stats in 2024:

• US RegTech deal activity dropped by 28% YoY
• Californian companies secured 31% of the US RegTech deals as it continued its domination of the marketplace in 2024
• New York based Claroty, specialists in the protection of cyber-physical systems,  secured one of the biggest US RegTech deal for the first year with a $100m funding round

US RegTech deal activity dropped by 28% YoY

The US RegTech market experienced a decline in both funding and deal activity in 2024 compared to 2023.

RegTech companies raised $5.01bn in 2024, marking a 28% decrease from the $6.99bn recorded in 2023.

Deal activity also saw a sharp decline, with 228 deals completed in 2024, down 45% from the 413 deals recorded in 2023.

While 2024's funding remained higher than the $4.39bn raised in 2020, the reduction in both funding and deal count highlights a challenging investment environment, reflecting shifting priorities among investors and ongoing economic pressures.

Californian companies secured 31% of the US RegTech deals as it continued its domination of the marketplace in 2024

California continued to lead in RegTech deal activity, with 93 deals (31% share) in 2024, representing a 37% decline from the 148 deals recorded in 2023.

New York followed with 46 deals (15% share), a decrease of 40% from the 77 deals completed in the previous year.

Florida ranked third with 19 deals (6% share), a 50% decline from the 38 deals reported in 2023.

Despite these significant drops, California and New York reinforced their dominant positions, emphasising their ongoing influence in the US RegTech ecosystem, even amid the sector's overall contraction.

New York based Claroty, specialists in the protection of cyber-physical systems,  secured one of the biggest US RegTech deal for the first year with a $100m funding round

This significant financial boost comes from a group of prestigious investors, including Delta-v Capital leading the equity charge, complemented by contributions from AB Private Credit Investors at AllianceBernstein, Standard Investments, Toshiba Digital Solutions, SE Ventures, Rockwell Automation, and Silicon Valley Bank, a division of First Citizens Bank.

The company specialises in safeguarding cyber-physical systems (CPS) across various sectors, including industrial, healthcare, commercial, and the public sector, while ensuring regulatory compliance through comprehensive risk management and monitoring solutions.

By integrating advanced RegTech solutions into its offerings, Claroty helps organisations navigate complex regulatory landscapes, ensuring compliance and robust protection for the Extended Internet of Things (XIoT).

The newly acquired funds are earmarked for scaling Claroty’s platform across key verticals and regions, enhancing product innovation, and fostering strategic partnerships, supporting the company's efforts in expanding its reach within the public sector and critical infrastructure industries across the Americas, EMEA, and Asia-Pacific.

Weekly FinTech deal roundup

€170m Wefox deal headlines slow start to 2025 FinTech funding – This week’s FinTech funding rounds kicked off 2025 on a quiet note, with just seven deals completed, headlined by a €170 million raise from German InsurTech Wefox. Read the full story here.

InsurTech news

• Navigating insurance challenges in 2025 - As 2024 draws to a close, experts in the insurance sector are forecasting the trends and obstacles likely to define the industry in 2025. While technologies like generative AI are making waves in claims processing and customer engagement, age-old challenges around efficiency, accuracy, and security remain prominent. Read the full story here.
• How ChainThat’s BPA platform is helping insurers boost their operational excellence - Embracing innovation often requires challenging the status quo and partnering with solutions that not only address current demands but also anticipate future needs. ChainThat’s Beyond Policy Administration (BPA) platform has emerged as a game-changer for companies striving to achieve operational excellence. Read the full story here.
• Tokio Marine partners with Earnix to streamline pricing and rating strategies - Tokio Marine North America Services (TMNAS) has partnered with Earnix, a global provider of AI-driven SaaS solutions, to develop a centralised rate repository aimed at enhancing pricing and rating strategies. Read the full story here.

WealthTech news

• KBC and Doconomy partner to enhance financial literacy for Gen Z - Doconomy, a leading impact FinTech company that develops innovative tools for financial wellbeing and sustainability, has announced a partnership with KBC, a prominent European bank known for its robust multi-channel banking and insurance services. Read the full story here.
• How AI is revolutionising wealth management with smarter insights and efficiency - The wealth management industry is experiencing a significant transformation, driven by advancements in artificial intelligence (AI). Read the full story here.
• Village Capital invests $150k in Rhea and Regxta to empower women-led innovation in Africa - Village Capital, an organisation dedicated to supporting innovative ventures, has announced an investment of $150k in two women-led startups, Rhea Soil Health Management and Regxta, through Standard Chartered’s Women in Tech Financing Facility. Read the full story here.

RegTech news

• How KYC Portal CLM streamlines compliance across AML, ESG, DORA, and GDPR - Organisations are increasingly tasked with managing not just AML risks but also with adhering to ESG standards, the DORA, and the GDPR. Read the full story here.
• Quantifind’s 2024 milestones: Strengthening KYC and AML with advanced analytics - Quantifind, a leading provider of risk intelligence solutions for financial crime compliance, made significant advancements in 2024 to empower organisations with cutting-edge investigative tools. Known for its innovative approach, Quantifind specialises in leveraging machine learning and data science to enhance KYC and AML efforts, helping financial institutions detect and mitigate risks effectively. Read the full story here.
• Navigating the complexities of cross-border payment compliance - In the world of global transactions, compliance is more than just a regulatory necessity; it’s essential for maintaining trust and security. Read the full story here.

CyberTech news

• New SEC rules trigger 60% increase in cybersecurity incident reporting - Following the US SEC implementation of stringent cybersecurity disclosure regulations in 2023, there has been a marked increase in the reporting of cybersecurity incidents by publicly listed companies. Read the full story here.
• Mastercard acquires Recorded Future to enhance cybersecurity in digital payments - Mastercard has successfully completed its acquisition of Recorded Future, a pioneer in AI-driven threat intelligence. Read the full story here.
• CISA’s new directive sets sights on cloud security in US federal agencies - The CISA has issued Binding Operational Directive (BOD) 25-01, focusing on the implementation of secure practices within cloud services. Read the full story here.

ESG FinTech news

• Workiva survey reveals executive determination to uphold climate reporting standards - Despite the unpredictable political landscape marked by the recent 2024 elections, 85% of executives surveyed by Workiva have reaffirmed their commitment to moving forward with climate disclosures. Read the full story here.
• Wells Fargo exits global climate alliance amid political pressure - Wells Fargo has announced its withdrawal from the Net-Zero Banking Alliance, a collective effort among global banks to reduce greenhouse gas emissions to net zero by 2050. Read the full story here.
• China inaugurates first national corporate sustainability disclosure standards - Wells Fargo has announced its withdrawal from the Net-Zero Banking Alliance, a collective effort among global banks to reduce greenhouse gas emissions to net zero by 2050. Read the full story here.

Other FinTech news

• M-Files leverages generative AI to redefine knowledge work automation - M-Files, a global leader in information management solutions, was founded two decades ago to help knowledge workers operate smarter. The company aims to simplify document organisation by focusing on content rather than location, delivering enhanced productivity and compliance for its 5,000 customers across over 100 countries. Read the full story here.
• How Corporate Digital Identity can transform CLM in banking - The pressure on corporate and institutional banks to adopt digital transformation is mounting, driven by client demands for faster and more personalized services. Read the full story here.
• Are EU banks prepared for the instant payments revolution? - As we enter 2025, the European financial sector faces a significant transition with the implementation of the Instant Payments Regulation (IPR), adopted by the European Parliament and Council in March 2024. Read the full story here.