Voice of the Industry

Regtech M&As and investments under the microscope – Part 2 - Americas and Asia

Monday 26 July 2021 09:55 CET | Editor: Mirela Ciobanu | Voice of the industry

After addressing the key factors influencing the growth of the regtech market (accelerated digital transformation, regulation, compliance, cutting costs) and presenting some European major investments and acquisitions in this space, let’s continue our regtech M&A with Americas and Asia.

As mentioned in our previous instalment, with the global regtech market estimated to reach USD 13.4 billion by 2025, there is lots of growth potential. An increasingly complex regulatory environment, the rising number of fraudulent activities, the increasing need for risk and compliance management, the need for faster transactions have created the need to find more efficient ways to comply, thus driving the rise of the regtech industry.

Still, this industry is relatively fragmented globally, with no dominant player in the market or even the region. Due to digitalisation, use of smartphones, internet availability, financial services have become a rapidly changing environment, with tons of data constantly being created, generating new business models that address the demands of consumers. Innovative solutions happening via the cloud - data sharing, near real-time checks, or dedicated tools for various touch points of compliance like customer onboarding and new business relationships – enable organisations to do business from all over the world.

Regulatory risks associated with cross-border banking have risen sharply in recent years, and multijurisdictional and multi-regulatory data is sometimes difficult to be combined in one place, one platform. However, some regtechs have managed to do so by automating workflows and cross-border business activities. And investors know it. Let’s see where they have put their funds.


At the end of 2020, Nasdaq decided to buy Verafin, a fraud detection technology, and anti-money laundering software company based in Canada, in a cash deal worth USD 2.75 billion. Planning to enhance its existing regulatory and anti-financial crime solutions infrastructure through Verafin and to expand its existing regtech solutions, Nasdaq completed the acquisition in February 2021. Verafin offers its platform to more than 2,000 clients including leading banks and credit unions. Combining Nasdaq’s global reach with Verafin’s analytics and innovative investigation tools, the companies aim to create a next-generation suite of solutions to fight financial crime. Nasdaq estimates the inclusion of Verafin to increase organic revenue growth in the technology market business of 13-16% CAGR over the medium-term (3-5 years). Furthermore, benefiting from FIs investing in fincrime technology to comply with regulations, Verafin has delivered a compound annual revenue growth rate of approximately 30% over the last three years and expects to deliver more than USD 140 million in revenue in 2021.

Aiming to provide modern Regulatory Change Management (RCM) processes for compliance officers, risk officers, counsel, and regulators, regtech company Compliance.ai got USD 3 million in a Series A round of financing in November 2020. Besides the funding, the company added two significant new premium content partners such as Nacha and WesPay. Even if the funding round is not very high, the platform is growing quickly, both in terms of the offered capabilities and client base of compliance and risk professionals. This could assist the regtech to expand into international jurisdictions.

RegEd agreed to acquire the ComplianceMAX and FIRE Continuing Education businesses from National Regulatory Services (NRS). NRS is owned by Accuity, part of RELX, which is a global provider of information-based analytics and decision tools for professional and business customers. The group serves customers in more than 180 countries and has offices in about 40 countries. It employs over 33,000 people, of whom almost half are in North America.

Acquisitions also happen across continents/countries. US-based, outsourced provider of AML, KYC, and Bank Secrecy Act compliance solutions AML RightSource acquired Germany-based Passcon. Passcon offers managed services, advisory, and technology solutions across the anti-financial crime spectrum, worldwide, with a team of 300 members and more than 10 offices across EMEA, APAC, and North America.

In terms of investments and acquisitions that might happen in 2021/2022, hot regtechs to watch out in this region are Mindbridge.aiMuinmos (winner of the Best RegTech Reporting Solution at the Global Forex Awards 2021 – B2B.), Refinitiv (acquired by the London Stock Exchange for USD 27 billion). With more than 100 employees and growing, six-year-old Ottawa fintech firm, MindBridge continues to build its customer network, due to its artificial intelligence platform that can quickly scan financial documents to detect anomalies, helping auditors do their jobs more efficiently. At the end of 2020, the company got USD 11 million from the Canadian Government to accelerate AI development.

Helping banks and fintechs make prudent identity and risk decisions using a single API service and SaaS platform, Alloy, a New York-based fintech, raised USD 40 million in September 2020. The increased focus on digital account opening during the pandemic has led to Alloy nearly doubling revenue as well as its customer base to around 100 banks and fintechs in 2020. Furthermore, in 2021, the company has increased its transaction monitoring capabilities, to help financial institutions build a complete identity profile that encompasses the entire customer lifecycle, and has rebranded to focus on helping clients ‘know the unknown’.

Also, investment company KKR poured USD 200 million into financial technology group Feedzai. Not necessarily a pure regtech company, Feedzai develops AI and machine learning technology that helps banks and other financial firms to spot and prevent payments fraud, money laundering, and other types of illicit activities. Worth mentioning is the fact that Feedzai’s clients include large companies such as Citigroup, Fiserv, and Banco Santander, as well as well-known fintechs such as SoFi. The current investment round has increased the startup’s value by more than USD 1 billion.

In Latin America, in March 2021, tax software provider Sovos acquired Fit Sistemas, a Brazilian provider of cloud-based regulatory reporting and electronic invoicing solutions to leverage its reporting capabilities and cloud building blocks across the region.

Canada’s unicorn

It has become clear that regtech companies can bring improved compliance to regulations such as KYC/AML and efficiency to identity verification processes. That is why no wonder identity verification startup, Trulioo, Canada-based, raised USD 394 million in a funding round led by venture capital firm TCV and was also backed by existing investors Blumberg Capital, Mouro Capital, and the venture-capital arms of Citigroup and American Express. The startup is now valued at USD 1.75 billion joining Canada’s rapidly growing elite ranks of ‘unicorns’. The reason investors are flocking? Doing business in a very large market, having ‘an excellent management team, and a company exhibiting significant momentum’, said Trulioo chief executive Steve Munford in an interview. Trulioo’s GlobalGateway can confirm the identities of five billion people and verify 330 million companies, in over 190 countries, via its 200 data sources. The company has more than 400 customers, including payments processors, online marketplaces, cryptocurrency exchanges and financial giants.


For the last 12 months, there haven’t been notable M&As or big investments in Asian regtech companies. However, important steps have been made by regulators to clean up the financial system from bad actors and enhance trust in the financial industry. At the end of 2020, the Hong Kong Monetary Authority (HKMA) rolled out a two-year roadmap to promote regtech adoption in the Hong Kong banking sector. The increased scrutiny over crypto has led the Monetary Authority of Singapore (MAS) to publish an infographic setting out its supervisory expectations on AML/CFT controls for the Digital Payment Token (DPT) sector, in March 2021. In Singapore, MAS noted an upward trend of suspicious virtual asset transaction reports lodged with law enforcement, including transactions relating to scams, fraud, cybersecurity-related offences, and darknet marketplaces.

Silent Eight, a Singapore-based technology company leveraging AI to create custom compliance models, completed a new round of early-stage funding led by OTB Ventures, the largest dedicated VC firm investing in technology businesses originating from Central and Eastern Europe, bringing the company’s total capital raised to USD 15 million. The round was also supported by the fintech investment and ventures arm of Standard Chartered Bank. This enabled the fintech to expand its capabilities, and convince HSBC to sign a multi-year partnership with the regtech to automate its compliance operations.

Other players in the Asian region include Cynopsis Solutions, a startup from Singapore that specialises in transaction monitoring, and RegTech Award finalist in 2020; and Know Your Customer, winner of Best Solution – Customer Onboarding in the 2020 edition of the Regulation Asia Awards of Excellence and Refinitiv’s partner. With USD 20.5 million in investment raised so far, Singapore-based Tookitaki provides enterprise software solutions to enable sustainable regulatory compliance programs in the financial services industry. Their mission is to provide machine learning-powered regulatory compliance solutions that are auditable, scalable, and actionable.

In India, even if there isn’t a dominant player in the region, notable regtech players include Verisk Financial | Fintellix, which leverages existing data infrastructures to solve complex data management, risk, regulatory, and business issues; and Jocata, a firm specialising in KYC, AML, and CFT, using AI and machine learning. At the moment the company is in the process of setting up a Centre of Excellence (CoE) for Machine Learning and they plan to go live with it in a few months.


The 2021 Deloitte banking regulatory outlook highlights regtech as one of the topics that will remain top of mind over the next five years, at least. Moreover, using a regtech solution will shift from a ‘nice-to-have’ to becoming a business accelerator by providing value-added technology. This shift will necessarily entail a broad adoption of mature providers. And with regtech providers tapping into technology and adding more data points to refine their models, their advantage over competitors will only grow, enticing investors to pour money into their platforms.

About Mirela Ciobanu

Mirela Ciobanu is a Senior Editor at The Paypers and has been actively involved in drafting industry reports, carrying out interviews, and writing about innovation in payments and fintech. She is passionate about finding the latest news on AI, crypto, blockchain, DeFi and she is an active advocate of the need to keep our online data/presence protected. Mirela has a bachelor’s degree in English language and holds a master’s degree in Marketing. She can be reached at mirelac@thepaypers.com or via LinkedIn.

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Keywords: banks, fintech, regtech, data sharing, AML, KYC, merger, acquisition, Feedzai, Trulioo, identity verification, Silent Eight
Categories: Fraud & Financial Crime
Countries: World
This article is part of category

Fraud & Financial Crime