US RegTech Funding Plummets 28% in 2024: Deals Under $100M Reach Five-Year Low

US RegTech Funding Plummets 28% in 2024: Deals Under $100M Reach Five-Year Low

In 2024, the landscape of RegTech investments in the United States experienced significant shifts, with funding levels declining sharply compared to previous years. The trends indicate a more cautious approach from investors as they navigate evolving regulatory challenges.

Decline in US RegTech Funding

The US RegTech market witnessed a notable downturn in funding and deal volume in 2024:

  • Total funding fell by 28% year-over-year, reaching $5 billion compared to $7 billion in 2023.
  • The number of deals dropped to 228, a 45% decrease from 413 deals in 2023.
  • Average deal sizes rose to $22 million, a 30% increase from $16.9 million in 2023.

Smaller Deals Hit Hard

Smaller deals, specifically those valued under $100 million, experienced a significant decline:

  • Deals under $100 million totaled $2.1 billion, down 38% from $3.4 billion in 2023.
  • This marks the lowest level of funding for such deals in the past five years.

Larger Deals Maintain Presence

In contrast, larger deals (valued at $100 million or more) accounted for:

  • $2.9 billion in funding, representing a 19% decline from $3.6 billion in 2023.
  • This is a 100% increase compared to the $1.4 billion raised in 2020.

Norm AI: A Bright Spot in the Market

Amidst the downturn, Norm AI emerged as a leader in AI-powered regulatory compliance, securing a significant Series A funding round of $27 million. This funding was led by Coatue, with participation from Bain Capital Ventures, Blackstone Innovations Investments, Citi Ventures, and others.

So far, Norm AI has raised over $38 million from institutions managing assets exceeding $5.75 trillion. The company specializes in translating government regulations into executable code, significantly improving compliance efficiency for businesses.

READ ALSO  Certiverse Secures $11M Series A Funding Led by Cherryrock to Revolutionize Certification Platforms

Transforming Compliance Processes

Norm AI’s innovative platform has already been adopted by several Fortune 100 companies, drastically reducing compliance analysis time from days to mere minutes. This strategic funding will enable further development of their platform and enhance AI integration within compliance processes, solidifying Norm AI’s position as a pioneer in the RegTech industry.

For more insights into the evolving RegTech landscape, visit our RegTech Insights page or check the latest updates on Forbes.

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