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The global RegTech sector is experiencing a significant uplift, with funding projected to increase by 12% in 2025. This surge is driven by investors increasingly backing innovative solutions designed to navigate complex regulatory landscapes. The first three quarters of 2025 alone saw a robust 7% year-over-year growth in RegTech funding, alongside an 8% rise in deal volume.
A key trend highlights that deals under $100 million have surged by an impressive 29%, indicating a shift in investor appetite towards smaller and mid-sized transactions. Spearheading this growth, Protecht, a leader in governance, risk, and compliance (GRC) solutions, secured the largest global RegTech deal of the period with a $280 million investment from PSG Equity, aimed at accelerating its international expansion.
RegTech Investment Soars by 7% Year-over-Year
The Global RegTech market demonstrated strong performance through the first nine months of 2025, recording substantial increases in both funding and deal activity compared to the same period in 2024. Total funding reached $5.5 billion, marking a 7% increase from the $5.1 billion raised in the first three quarters of the previous year. Concurrently, the volume of deals expanded to 385, an 8% rise from the 356 transactions completed over the same timeframe in 2024.
Despite this heightened activity, the average deal size remained relatively stable at $14.3 million in Q1-Q3 2025, only slightly down from $14.4 million in the corresponding period of 2024. This stability suggests a consistent market demand spread across various deal sizes, reflecting a healthy and balanced investment ecosystem.
2025 Projections: A 12% Funding Boost Expected
Based on the strong performance observed in the first three quarters, total RegTech funding for the entire year 2025 is projected to reach an impressive $7.3 billion across an estimated 513 deals. This forecast signifies a remarkable 12% increase in funding compared to the $6.5 billion raised in 2024, coupled with a 16% rise in deal activity relative to the 444 deals completed last year.
Under this optimistic projection, the average deal size for 2025 is anticipated to remain around $14.3 million, mirroring current levels. While such projections inherently assume sustained market momentum, they underscore the RegTech sector’s inherent resilience and its capacity for consistent, incremental expansion in response to evolving regulatory demands.
Smaller Deals Dominate: Under-$100m Transactions Surge 29%
A notable trend in the first nine months of 2025 reveals a significant shift in investment patterns. Deals valued under $100 million collectively amounted to $3.6 billion, representing a substantial 29% increase from the $2.8 billion recorded in the same period of 2024. Conversely, larger deals, those valued at $100 million or more, saw a decline, dropping to $1.9 billion—a 20% decrease from the $2.3 billion raised in the first three quarters of 2024.
Projecting these trends to the full year, funding for deals under $100 million is estimated to reach $4.9 billion, a considerable jump from $3.5 billion in 2024. In contrast, large-scale deals are expected to total approximately $2.5 billion, falling below the $3.0 billion mark seen last year. These figures clearly indicate a growing preference among investors for smaller and mid-sized transactions, signaling increased confidence in earlier-stage or mid-market RegTech propositions over major, high-value funding rounds.
Protecht Secures $280M to Fuel Global GRC Expansion
Protecht, a prominent provider of governance, risk, and compliance (GRC) solutions, secured the largest global RegTech deal in the first nine months of 2025 with a $280 million investment from PSG Equity. Operating at the forefront of risk and technology, Protecht offers an enterprise risk management platform that helps organizations transition from manual processes to integrated, AI-driven risk solutions.
With increasing regulatory scrutiny and over 79% of global data now under policy regulations, Protecht’s technology empowers firms to efficiently manage third-party risk, compliance, and governance. Its advanced platform utilizes automation and analytics to deliver real-time insights, bolster operational resilience, and support smarter decision-making across diverse sectors including financial services, government, and education.
The new capital infusion is set to significantly accelerate Protecht’s growth and product innovation, particularly in integrating AI capabilities into its risk management tools. This strategic move is poised to solidify its position as a global leader in the expansive $22 billion risk management software market. Furthermore, this substantial deal highlights the growing influence of Australian tech firms in delivering mission-critical, scalable solutions for global enterprises navigating increasingly complex regulatory environments.
Source: fintech.global