Regtech exits hit 5-year high with 29 M&As and 1 IPO.
Last year was a record for exits in the regtech category, with 30 total M&As and IPOs. Exits in regtech have been on the rise over the past 5 years.
The steady pace of exit activity is unsurprising given the surge in deals and funding in the category. On a yearly basis, deal activity in regtech took off in 2014, remained strong in 2015, and broke 100+ deals in 2016.
We define regtech as companies developing technologies aimed at simplifying and streamlining compliance, risk management, reporting, data management, and more.
Using CB Insights data, we analyzed first exits in regtech from 2012-2016. We also created a timeline showcasing regtech first exits between 01/01/16-02/14/17.
Annual exit trends
In 2016 there were 30 regtech exits, including 29 M&A transactions and 1 IPO. The most well-funded regtech startup with disclosed funding that has exited since 2012 is Reval. Reval is a liquidity risk management platform that was acquired by ION Investment Group in Q4’16 and raised $86.9M in total funding.
Exit activity swelled in 2014 when there were 23 exits, just 1 exit shy of doubling 2013’s total.
Increasing exit activity over the last few years is unsurprising given how overall deal activity in the category has picked up in the last five years.
2016 exits trends
To analyze the timeline of exits and investors in the sector, we used CB Insights data to plot each startup’s respective exit since 2016 – 2017 through 02/14/17.
- Many of these acquisitions were of early-stage regtech companies, including Evantix, a third-party risk management software provider, that was acquired by Optiv Security.
- The acquirers in the category range from early-stage funds like Medina Capital to private equity firms like BC Partners, which acquired Catbird Networks in a joint acquisition in Q4’16.
- Also making acquisitions are regtech startups like Contego Fraud Solutions which acquired Working Status in Q4’16.
- Corporates are actively making strategic acquisitions such as Cisco’s acquisition of cloud security provider CloudLock in Q2’16.
- 2017 already saw its first exit with Telavance, an AML compliance risk management software that was acquired by ACA Compliance group.
|November Research Group – Pharmacovigilance Technology Services Division||Acquired Unit||HighPoint Solutions||Q1’16|
|Kneat Solutions||Reverse Merger||Fortune Bay Corp||Q1’16|
|Risk Intelligence Ireland||Acquired||Verisk Analytics||Q2’16|
|Merrill Corporation – Merrill Brink International, The Language Services Division||Acquired Unit||United Language Group||Q2’16|
|Jumio||Acq – Fin||Centana Growth Partners||Q2’16|
|CannaScore||Acquired||CS Compliance Systems||Q2’16|
|Privacy Analytics||Acquired||IMS Health||Q2’16|
|Sphera||Acquired Unit – Fin||Genstar Capital Partners||Q2’16|
|IMI Health||Acquired||Centauri Health Solutions||Q2’16|
|Steele Compliance Solutions||Acq – Fin||Bregal Sagemount||Q2’16|
|Regulatory DataCorp||Acq – Fin||Vista Equity Partners||Q3’16|
|SAI Global||Acq – Fin||Baring Private Equity Asia||Q3’16|
|Reval||Acquired||ION Investment Group||Q4’16|
|Catbird Networks||Acq – Fin||BC Partners;Medina Capital||Q4’16|
|Business and Legal Resources||Merger||Simplify Compliance Holdings||Q4’16|
|Telavance||Acquired||ACA Compliance Group||Q1’17|
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