Key US RegTech investment stats in Q1 2025:
- Funding increased by 9% in Q1 2025 YoY
- US RegTech funding projected to grow by 26% in 2025
- Growth in funding was driven by an 18% surge in deals over $100m
- SpecterOps, a RegTech and cybersecurity company specialising in identity risk reduction and adversary-focused security solutions, secured one of the largest US RegTech deals of the quarter with a $75m Series B funding round
Funding increased by 9% in Q1 2025 YoY
In Q1 2025, the US RegTech market experienced a mixed shift, with deal volume declining but overall funding increasing compared to the same period in 2024.
A total of 54 deals were completed, down 31% from the 78 deals recorded in Q1 2024.
Despite the slowdown in deal activity, funding rose to $1.6bn, a 9% increase from the $1.4bn raised in Q1 2024.
This divergence suggests that investors are becoming more selective, favouring fewer but larger deals — a sign of growing confidence in mature or commercially validated RegTech propositions.
US RegTech funding projected to grow by 26% in 2025
Should this Q1 2025 trend persist through the remainder of the year, 2025 would close with 216 deals and $6.3bn in total funding.
This would reflect a slight 5% drop in deal volume compared to the 228 deals completed in 2024, but a 26% increase in total funding from the $5.0bn raised last year.
The average deal size in Q1 2025 reached $28.9m, significantly higher than the $18.4m average in Q1 2024, reinforcing a shift toward funding later-stage companies or larger growth rounds.
This recalibration highlights a market increasingly focused on scalable solutions and enterprise adoption, with capital flowing into firms capable of driving measurable impact in compliance, reporting, and digital regulation.
Growth in funding was driven by an 18% surge in deals over $100m
Deals under $100m in Q1 2025 accounted for $644m, holding relatively steady compared to the $650m recorded in Q1 2024.
However, deals worth $100m or more surged to $920m, up 18% from the $782m posted in the same quarter last year.
For reference, in 2024, deals under $100m made up $2.1bn of the $5.0bn total, while deals over $100m contributed $2.9bn.
If the current quarterly pattern continues, deals under $100m could stay flat YoY, while deals over $100m may drive the majority of the funding growth.
This trend suggests that although early-stage capital remains present, institutional investors are increasingly prioritising large, proven platforms capable of navigating regulatory complexity at scale.
SpecterOps, a RegTech and cybersecurity company specialising in identity risk reduction and adversary-focused security solutions, secured one of the largest US RegTech deals of the quarter with a $75m Series B funding round
The round was led by Insight Partners, alongside participation from M12, Cisco Investments and others.
The funding will accelerate the growth of its flagship platform, BloodHound Enterprise (BHE), the industry’s first solution focused on comprehensive removal of Identity-based Attack Paths in Microsoft Active Directory and Entra ID environments.
SpecterOps addresses a critical blind spot in enterprise security architecture by treating identity infrastructure as a dynamic, interconnected graph, enabling real-time detection, prioritisation and remediation of attack vectors.
With over 1.5m downloads of its open-source BloodHound tool and more than 200 enterprise customers already onboarded to BHE, the company has established itself as a trusted leader in the identity-centric security domain.
Its contributions to the cybersecurity community—spanning over 400 research outputs, 90 open-source tools and training of more than 7,000 professionals—underscore its pivotal role in shaping modern identity threat management.
This latest investment will allow SpecterOps to expand research, consulting and go-to-market capabilities, reinforcing its position as a frontrunner in proactive identity threat detection and regulatory resilience.
Keep up with all the latest RegTech news here
Copyright © 2025 RegTech Analyst
Copyright © 2018 RegTech Analyst
