Key US RegTech investment stats in Q1 2025:
- US RegTech deal activity dropped by 28% YoY in Q1 2025
- California continued to lead the US RegTech market as they secured 43% of the deals in the quarter
- Cybereason, a leading global cybersecurity company known for its advanced endpoint detection and response (EDR) solutions and expert consulting services, secured one of the largest RegTech deals in Q1 with a $120m funding round
US RegTech deal activity dropped by 28% YoY in Q1 2025
In Q1 2025, the US RegTech market witnessed a moderate rebound in funding activity.
Total capital raised reached $1.6bn, reflecting a 9% increase from the $1.4bn recorded in Q1 2024.
However, deal volume saw a 28% decline, falling from 105 deals to 76 deals YoY.
This divergence suggests a shift towards fewer but larger transactions, indicating sustained interest from investors in scaling or later-stage RegTech firms despite broader caution within the tech funding environment.
California continued to lead the US RegTech market as they secured 43% of the deals in the quarter
California maintained its dominance as the top RegTech hub in the US, completing 33 deals in Q1 2025, representing a 43% share—up significantly from 29 deals (28% share) in Q1 2024.
New York followed with 13 deals (17% share), a slight increase from 12 deals (11% share) the previous year.
Texas emerged as the third most active state with six deals (8% share), replacing Massachusetts, which had recorded eight deals (8% share) in Q1 2024.
These changes highlight California’s growing concentration of RegTech activity and suggest a narrowing geographic focus, as top states absorb a larger proportion of the nation’s total deal count amid a more selective investment landscape.
Cybereason, a leading global cybersecurity company known for its advanced endpoint detection and response (EDR) solutions and expert consulting services, secured one of the largest RegTech deals of the quarter with a $120m funding round
The investment was led by SoftBank Corp., SoftBank Vision Fund 2, and Liberty Strategic Capital.
The funding underscores strong investor confidence in Cybereason’s capabilities to address increasingly complex cyber threats and solidifies its position as a trusted security partner for enterprises worldwide.
With clients in over 40 countries and a growing strategic partnership with Trustwave, the company is doubling down on its mission to support organisations through every stage of the incident lifecycle.
The capital injection will fuel Cybereason’s global expansion, strengthen its EDR and consulting offerings, and accelerate the adoption of its cutting-edge threat protection platform across highly regulated industries, reinforcing its prominence in the rapidly evolving RegTech space.
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