Compared to a number of other areas of fintech, global investment in regtech showed strong resilience in H1’22. Globally, regtech companies attracted $5.6 billion in investment across 157 deals — following a similar trajectory to the level of investment seen in 2021. The US accounted for the largest share of regtech investment during H1’22, including the $2.6 billion buyout of Bottomless Technologies by Thomas Bravo, the $450 million Series D raise by ConsenSys, and the $240 million acquisition of FourQ by cloud-based financial operations company Blackline.

What to watch for in H2'22

• Continued development, evolution, and implementation of regulatory regimes and guidelines, such as MiCA, Basel IV, and ESG standards
• Financial system regulators widening their expectations beyond traditional banks and financial institutions to include other contributors to the capital markets — such as asset managers and challenger banks
• Increasing focus on AI-powered identity verification, KYC & AML compliance and identity proofing on order to increasingly automate the prevention and combat of fraud

After a very strong 2021, wealthtech investment softened considerably in H1’22, mirroring the decline in investment more broadly around the world. Globally, wealthtech attracted $440 million during H1’22, led by US-based Titan’s $100 million VC funding round, and UK-based MoneyFarm’s $59.8 million PE deal.

What to watch for in H2'22

• Increasing focus on solutions aimed at the B2B2C market.
• Consolidation across the wealth management and wealthtech ecosystem, including among advisors.
• The large transfer of wealth across generations beginning to drive innovation and the development of unique wealth management solutions
• Increasing focus on companies focused on helping traditional wealth management firms understand and use their data more effectively
• Growing focus on ESG, from an investment decision making perspective
• Burgeoning focus on leveraging open finance and embedded finance to expand wealth management opportunities

At the end of H1’22, global investment in cybersecurity was running well short of 2021’s record, primarily due to the lack of a completed blockbuster M&A deal similar to the $2.7 billion acquisition of Verafin in H1’21. Despite the lack of completed M&A deals, VC investor interest and investment in the cybersecurity space remained strong — led by four big raises in the US, including a $550 million raise by Fireblocks, a $170 million raise by Chainalysis, and $100 million raises by TokenEx and Cowbell Cyber. Estonia-based Veriff also raised $100 million during H1’22. The volume of cybersecurity deals globally was also very robust at mid-year, if just shy of record pace.

What to watch for in H2'22

• Increasing consolidation as companies that traditionally focused on one segment of cybersecurity (e.g., endpoint alerting) look to build out their cybersecurity offerings
• Shift in focus from MDR as a means for conducting level one ticket triage to MDR providing full stack response
• Continued focus on startups focused on extreme automation

After a record-shattering 2021, global investment in crypto and blockchain fell to $14.2 billion during H1’22. Despite the crypto space collapsing significantly since mid-way through Q1’22 due to the unexpected Russia-Ukraine conflict, rising inflation, and the challenges experienced by the Terra crypto ecosystem, investment at mid-year remained well above all years prior to 2021. This highlights the growing maturity of the space and the breadth of technologies and solutions attracting investment. During H1’22, the largest deals in the space came from VC raises, including a $1.1 billion raise by Germany-based Trade Republic, a $550 million raise by US-based Fireblocks, a $500 million raise by Bahamas-based FTX, and a $450 million raise by ConsenSys.

What to watch for in H2'22

• Resilience of crypto-focused companies being tested very hard as some look to recapitalize at lower valuations
• Well managed crypto companies with healthy risk management policies, long-term vision, and strong cost and risk management approaches surviving, while others bust
• Growing focus on solutions related to compliance and crypto transaction traceability
• Increasing interest in stablecoins, particularly from corporates looking to gain the operational advantages of crypto, including costs, delays, visibility, liquidity, and ease-of-use
• Innovative partnerships between crypto firms and companies in other industries in order to address ESG concerns