Key US RegTech investment stats in Q2 2025:
- US RegTech funding halved YoY in Q2
- No deals over $100m were recorded as investor appetite for large scale investments reduced
- Virtue AI, a California-based RegTech innovator focused on generative AI safety and compliance, secured $30m in one of the largest RegTech funding rounds in the US for Q2
US RegTech funding halved YoY in Q2
In Q2 2025, the US RegTech market recorded 69 deals, representing a 17% increase from the 59 deals seen in Q2 2024 and a 28% rise from the 54 deals completed in Q1 2025.
Despite the uptick in activity, total funding fell sharply to $726.1m — the lowest level recorded in the period — down 56% from the $1.6bn raised in Q2 2024 and a 54% drop from the $1.6bn secured in Q1 2025.
The average deal size declined significantly to $10.5m, compared to $27.9m in Q2 2024 and $28.9m in Q1 2025, underlining a notable investor shift towards smaller transactions.
No deals over $100m were recorded as investor appetite for large scale investments reduced
All funding in Q2 2025 came from deals valued under $100m, totalling $726.1m — a 15% increase from the $633.1m raised by similar-sized deals in Q2 2024 and 13% higher than the $643.6m recorded in Q1 2025.
Notably, there were no deals over $100m in Q2 2025, marking the first time this has occurred within the tracked period.
In both Q2 2024 and Q1 2025, large-scale deals accounted for over $1bn and $920m respectively.
The complete absence of high-value transactions in the latest quarter highlights a significant retraction in investor appetite for large-scale commitments within the RegTech space.
Virtue AI, a California-based RegTech innovator focused on generative AI safety and compliance, secured $30m in one of the largest RegTech funding rounds in the US for Q2
The round was co-led by Lightspeed Venture Partners and Walden Catalyst Ventures, with participation from high-profile investors including Prosperity7 and Osage University Partners.
Founded by leading AI researchers, Virtue AI delivers an enterprise-grade platform built to mitigate AI-specific risks such as hallucinations, prompt injections and data poisoning—threats often overlooked by traditional cybersecurity.
Its suite includes VirtueRed, a red-teaming solution assessing over 320 risk vectors; VirtueGuard, a real-time guardrails engine; and VirtueAgent, an automation tool for embedding compliance and safety into AI workflows.
As generative AI adoption surges across sectors, Virtue AI’s platform enables businesses to deploy advanced models safely and in line with regulatory standards.
This funding will be used to enhance platform capabilities, broaden go-to-market efforts and attract top AI talent, further establishing Virtue AI’s leadership at the intersection of AI and regulatory technology.
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