Regtech Market Map: The Startups Helping Businesses Mitigate Risk And Monitor Compliance Across Industries

RegTech Cover VF4

Regtech companies operate across financial services, vendor risk management, cybersecurity, environmental protection, cannabis, and other categories.

To maintain compliance with existing regulations and keep up with new ones, companies are increasingly looking to tech solutions that can help streamline and manage data, processes, filings, and more. A host of tech startups in the regulatory space has emerged that offer a range of software, services, and tools aimed at bringing more data and efficiency to regulatory compliance.

We refer to this category of tech companies as regtech, and define it as companies developing technologies aimed at simplifying and streamlining compliance, risk management, reporting, data management, and more. In the last 5 years, regtech companies have raised $2.3B in funding across 317 deals. Though the bulk of startups in this space are focused on compliance in the financial services sector, there are several startups that are working on regtech related to healthcare, environmental protection, food and drug, cybersecurity, blockchain, and even cannabis.

We used the CB Insights database to identify over 100 private companies in regtech and organized them into 9 categories, including 9 sub-categories within financial services, which has some of the most extensive regulatory requirements. All companies on the map have received equity funding since 2015 and have raised at least $1M.

RegTech Startup Trends
Regtech startups are helping companies decipher regulatory complexities, leveraging AI and data analytics, and proactively identifying and mitigating risk. This webinar will dive into investment areas, trends, and more.

Please click on the map to enlarge. The map is not meant to be exhaustive of companies in the space.

Reg Tech 2017 VF4

The breakdown is as follows:

Financial Services: This category contains companies that focus on serving the financial services industry. We group companies in this larger category into 8 sub-categories by the type of risk mitigation or regulation the companies are focused on addressing. Some companies may overlap and are subcategorized per their main use case.

AML / KYC:This sub-category includes companies that address anti-money laundering (AML) requirements, which prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering activities. Know Your Customer (KYC) tools help verify the identity of clients or personnel. Companies in this subcategory include Trunomi, a platform that centrally stores, protects, and provisions identification information and ComplyAdvantage, a proprietary database of individuals, organizations, and associated entities that continuously monitors and responds to financial crime risk information.

Blockchain / Bitcoin:One of the largest concerns regulators and public and private market participants have with blockchain technology and bitcoin exchanges is security. Companies like Skry, a platform that conducts risk assessments and monitors blockchain technology, and Elliptic, a database that can assemble an audit-trail of bitcoin addresses, are helping establish a trusted network and traceability.

Enterprise Risk Management: This sub-category includes companies that address broader risk types that impact more than one area of the enterprise, such as fraud risk. This includes Fenergo, a client life-cycle management platform that provides end-to-end regulatory onboarding and monitoring for fraud. This also includes Argos Risk, a web-based platform that helps companies manage credit risk and protect against business identity fraud.

Operations Risk Management: Companies in this sub-category provide software to manage the day-to-day operational risks of a financial services organization. This includes governance, risk mitigation, incident identification, issue tracking, monitoring for compliance obligations, data storage, and reporting. Companies in the ORM sub-category include Rsam, a provider of Governance, Risk and Compliance (GRC) software and NetGuardians, a risk management software that facilitates incident identification, tracking, and management.

Portfolio Risk Management:Companies that provide tools to assess and monitor the health of investment portfolios to stress test risks and make sure financial services firms are not taking on undue risk. This includes Kyriba, a SaaS treasury management tool that provides reporting and analytics and nCino, a bank operating software that provides a suite of portfolio management services.

Quantitative Analytics:Companies in this sub-category are providing tools to manage credit, market, and liquidity risk through analytics and quantitative risk modeling. This category includes valuation and modeling software provider FINCAD, and Ayasdi, a machine learning and AI-enabled analytics tool.

Reporting:These companies provide a mix of software and tools to incorporate data analytics into reporting, automate regular and ad-hoc reporting, and centrally maintain information for future reporting requests. This includes Capital Confirmation, a secure electronic reporting confirmation service for auditors, and Certent, a web-based technology that streamlines financial reporting.

Tax Management: These companies provide software that collects required tax revenue, conducts record keeping, and aids with government required fillings. This sub-category includes Avalara, a web-based solution that automates tax collection and Canopy Tax, a SaaS-based tax management platform.

Trade Monitoring: This sub-category includes companies providing software to monitor employees to ensure compliance with trade restrictions, and to monitor client trading activity for unauthorized transactions. It includes OpenGamma, a platform that centrally monitors that trading activity is within risk management boundaries and Droit Fintech, an over-the-counter (OTC) derivative trading platform that facilitates compliance with applicable global regulations.

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Cannabis: This category applies generally to regulation of the cannabis industry. The legality of cannabis varies from country to country and state to state. As the marijuana legalization debate continues, companies have cropped up to help ensure regulatory compliance. This includes MJ Freeway, a seed-to-sale management and tracking software company and Hypur, a banking services software company for cash-intensive businesses such as cannabis sales.

Environment, Health, Safety, and Quality: This category includes companies that help with regulations that protect consumer health and safety, the environment, and product quality standards. Startups in this category include iCiX, a network and application to monitor the extended supply chain for product safety and compliance with local regulation and OnRule, a database for maintaining and reporting on compliance, testing, and certification for manufactured goods.

General Compliance Management: The startups in this category provide tools for implementing a compliance management program, including monitoring compliance with internal policies and industry-specific guidelines. This includes Convercent, a customized compliance management software provider, and Oversight Systems, a web-based expense management software provider.

Government / Legislation: Startups in this category are providing tools to manage and monitor impending regulation, reforms, and legislation to help companies in various industries keep up with applicable regulations. This includes companies like FiscalNote, a platform for real-time legislative and regulatory analysis and TrackBill, a mobile application to identify and track legislation in real-time.

Healthcare: These companies help with regulation specific to the healthcare industry such as patient information protection, patient care practices, and other compliance requirements. The category includes Invisalert Solutions, a wearable device that monitors and tracks patient care while in a hospital and Qualtrax, software that centrally manages accreditation, testing, and training documents for labs.

Identification / Background Check: In addition to the financial services industry, identity verification regulations exist in others industries including healthcare and construction. Startups in this category are not specific to one industry. They include Onfido, which leverages machine-learning technology to scan multiple verification databases and run cross-sector background checks remotely. Also included is Verato, a cloud-based platform that cleans, validates, and links customer/patient records across systems to create a master centralized record.

Information Security / Cybersecurity: This category includes companies that proactively identify information security and cybersecurity threats, conduct vulnerability management, threat remediation, and alert notification to help companies stay in compliance with information security protocols. This includes RiskIQ, a software company that identifies behavioral patterns while monitoring to detect anomalies, policy violations, and previously undetected threats.

Vendor Risk Management: Companies in this category are providing software to automate, facilitate, and centralize the execution of a continuous vendor risk management program in accordance with regulatory guidance on third-party risk management. This guidance was established by global regulators to manage and mitigate the risk associated with outsourcing operations and to establish a vendor due diligence process. Companies in this category include Venminder, a suite of software and services to assess, monitor, and manage third-party vendor risks and CBANC Network, a platform for professionals to collaborate on vendor selections.

See the full company list below:

Regtech Companies
Company Select Investors Category
ComplyAdvantage Balderton Capital AML/KYC
Contego Fraud Solutions FinTech Innovation Lab AML/KYC
Fortress Risk Management Axiom Venture Partners, Sorenson Capital AML/KYC
Trunomi Fintonia Group, Saturn Partners, WorldQuant Ventures AML/KYC
Chainalysis Converge Venture Partners, Digital Currency Group, FundersClub, Point Nine Capital, Techstars Ventures Blockchain/Bitcoin
Elliptic Digital Currency Group, Octopus Ventures, Paladin Capital Group, Santander InnoVentures Blockchain/Bitcoin
Skry 500 Accelerator, The Hive Blockchain/Bitcoin
BioTrackTHC Merida Capital Partners Cannibas
Helix TCS Undisclosed Investors Cannibas
Hypur Undisclosed Investors Cannibas
KindManage Lindy Snider Cannibas
MJ Freeway Tao Capital Partners, Roger McNamee Cannibas
PayQwick Undisclosed Investors Cannibas
Argos Risk Undisclosed Investors Enterprise Risk Management
Cloud9 Technologies Barclays Bank, J.P. Morgan Chase & Co., NEX Group, Point72 Ventures Enterprise Risk Management
Fenergo Aquiline Capital Partners, Insight Venture Partners, Investec Ventures Enterprise Risk Management
Finomial Bridgescale Partners Enterprise Risk Management
Qumram Ariel Luedi, Peter Stalder, Zirkonia Enterprise Risk Management
Assent Compliance Business Development Bank of Canada, National Research Council Canada, OpenText Enterprise Apps Fund, Royal Bank of Canada, Volition Capital Environment, Health, Safety, and Quality
Effective Software ACT Venture Capital Environment, Health, Safety, and Quality
iCiX Arrowroot Capital, Starfish Ventures, Draper Fisher Jurvetson Environment, Health, Safety, and Quality
Intelex Technologies HarbourVest Partners, JMI Equity Environment, Health, Safety, and Quality
OnRule Undisclosed Investors Environment, Health, Safety, and Quality
Rizepoint Access Holdings Environment, Health, Safety, and Quality
AgeCheq Ben Franklin Technology Partners General Compliance Management
ComplyGlobal Cambridge Innovations, IBCC, Tribeca Angels General Compliance Management
ConnXus Impact America, Serious Change Fund, Techstars Ventures General Compliance Management
Continuity Control BancVue, Club Circle Partners, River Cities Capital Fund, Trinity Capital Investment General Compliance Management
Convercent Azure Capital Partners, Brand Journey Capital, Sapphire Ventures, Tola Capital General Compliance Management
Flexeye KPMG Capital General Compliance Management
Gan Integrity Edison Partners General Compliance Management
Jewel Paymentech 8capita Partners, Tuas Capital Partners, Wells Fargo Startup Accelerator General Compliance Management
MeWe Undisclosed Investors General Compliance Management
Oversight Systems Advanced Technology, Granite Ventures, Sigma Partners General Compliance Management
Simpliance Quess Corp General Compliance Management
Social SafeGuard Grotech Ventures, Harbert Venture Partners, Salesforce Ventures General Compliance Management
Zlien Altos Ventures, Cajun Kiwi Investments, Knollwood Investment Advisory, Operating Venture Capital General Compliance Management
FiscalNote New Enterprise Associates, Renren Lianhe Holdings, AME Cloud Ventures,Dorm Room Fund, Mark Cuban, Green Visor Capital, Visionnaire Ventures Government / Legislation
LogicGate Chicago Ventures, Connetic Ventures, FireStarter Fund, Hyde Park Venture Partners, MATH Venture Partners, OCA Ventures, Sandalphon Capital, Techstars Ventures Government / Legislation
TrackBill Cultivation Capital, Serra Ventures Government / Legislation Undisclosed Investors Healthcare
Invisalert Solutions AWE Ventures, Science Center Healthcare
Qualtrax Common Wealth Growth, Lyden Capital Healthcare
Checkr Accel Partners, Y Combinator,Institutional Venture Partners Identification / Background Check
CommunityLeader Undisclosed Investors Identification / Background Check
NowWeComply AngelLab, London Co-Investment Fund Identification / Background Check
Onfido CrunchFund, Salesforce Ventures, Wellington Partners Identification / Background Check
Socure ff Venture Capital, Founder Collective, Two Sigma Ventures, Work-Bench Identification / Background Check
ThisIsMe Undisclosed Investors Identification / Background Check Bain Capital Ventures, Milliways Ventures Identification / Background Check
Trulioo American Express Ventures, BDC Venture Capital, Blumberg Capital, Tenfore Holdings Identification / Background Check
Verato Bessemer Venture Partners, Columbia Capital Identification / Background Check
Cloud Raxak Undisclosed Investors Information Security / Cybersecurity
CloudCover Undisclosed Investors Information Security / Cybersecurity
CloudPassage Benchmark, Lightspeed Venture Partners, Shasta Ventures Information Security / Cybersecurity
Core Security (Courion) JMI Equity, K1 Capital Information Security / Cybersecurity
Datiphy Highland Capital Partners Information Security / Cybersecurity
Druva Nexus Venture Partners, Sequoia Capital, Sequoia Capital India Information Security / Cybersecurity
EiQ Networks Arrowroot Capital Information Security / Cybersecurity
HyTrust Cisco Investments, Epic Ventures, Granite Ventures, Trident Capital Information Security / Cybersecurity
LogRhythm Access Venture Partners, Adams Street Partners, Riverwood Capital, Siemens Venture Capital, Silver Lake Information Security / Cybersecurity
Lumeta Gotham Ventures, New Venture Partners Information Security / Cybersecurity
Onapsis 406 Ventures, Arsenal Venture Partners, Evolution Equity Partners Information Security / Cybersecurity
Quarri Technologies Central Texas Angel Network, Houston Angel Network Information Security / Cybersecurity
Radar Undisclosed Investors Information Security / Cybersecurity
RedOwl Analytics Allegis Capital, Blackstone Group Information Security / Cybersecurity
RiskIQ Battery Ventures, Georgian Partners, MassMutual Ventures, Summit Partners Information Security / Cybersecurity
Skyhigh Networks Greylock Partners, Sequoia Capital Information Security / Cybersecurity
EverCompliant Arbor Ventures, Carmel Ventures, Nyca Partners, Star Farm Ventures Information Security / Cybersecurity
Ascent Technologies Undisclosed Investors Operations Risk Management
Corlytics Infinity Capital, Kernel Capital Operations Risk Management
NetGuardians Aurexia Consulting, Polytech Ecosystem Ventures Operations Risk Management
Rsam JMI Equity Operations Risk Management
Credit Benchmark Balderton Capital, Index Ventures Portfolio Risk Management
CreditPoint Software i2E Portfolio Risk Management
Kyriba Upfront Ventures, BRED Banque Populaire, Mitsubishi UFJ Capital Portfolio Risk Management
Limina Mats Berglund, Pontus Braunerhjelm Portfolio Risk Management
LoanLogics Robin Hood Ventures, Volition Capital, Blue Cloud Ventures Portfolio Risk Management
nCino Insight Venture Partners, Salesforce Ventures Portfolio Risk Management
QuanTemplate Allianz Ventures, Anthemis Group, Route 66 Ventures, Transamerica Ventures Portfolio Risk Management
Riskalyze FTV Capital Portfolio Risk Management
Ayasdi Floodgate, Institutional Venture Partners, Khosla Ventures and Kleiner Perkins Caufield & Byers Quantitative Analytics
FINCAD Wellington Financial Quantitative Analytics
AQMetrics Bluff Point Associates, Enterprise Ireland, FrontLine Ventures Reporting
Capital Confirmation Great Hill Partners Reporting
Certent Bridge Bank, K1 Capital Reporting
Global Debt Registry Undisclosed Investors Reporting Banque Internationale a Luxembourg, European Investment Bank Reporting
INTIX Michel Akkermans Reporting
Plia Systems Undisclosed Investors Reporting
Avalara Arthur Ventures, Battery Ventures, Benaroya Capital, Pioneer Venture Partners, Sageview Capital, Scott Steigerwald, Technology Crossover Ventures, Warburg Pincus, Waterman Limited Tax Management
Canopy Tax New Enterprise Associates, Deep Fork Capital, Epic Ventures, Tax Management
Exactor Undisclosed Investors Tax Management
Taxometry Undisclosed Investors Tax Management
VATBox Viola Private Equity Tax Management
Ancoa Buysse & Partners, LRM Capital, SmartFin Capital, Velocity Capital Private Equity Trade Monitoring
Compliance Science Edison Partners Trade Monitoring
Droit Fintech DRW Trading Group, Goldman Sachs, Pivot Investment Partners, Wells Fargo & Company Trade Monitoring
OpenGamma Accel Partners, Cristobal Conde, NEX Group Trade Monitoring
CBANC Network Adams Street Partners, Floodgate Vendor Risk Management
Certrax Risk Compliance Solutions WorldQuant Ventures Vendor Risk Management
Enterprise Risk Control Undisclosed Investors Vendor Risk Management
Prevalent Insight Venture Partner Vendor Risk Management
Venminder Bain Capital Ventures Vendor Risk Management

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