For regulated industries, technology is quickly advancing how companies manage their regulatory compliance. Technology is now mission-critical for banks, financial institutions, governments and enterprises; they all must grapple with significant regulatory volatility as we are seeing shifts like GDPR, Brexit and the tumultuous US political situation that is impacting taxation and health reform. These changes are driving M&A activity, sector-wide.

M&A in Regtech has been vibrant over the last year. On the data visualization and risk front, IBM acquired Agile 3 Solutions for $14M, and on the Fintech front, NASDAQ acquired Sybenetix for behavioral analytics and cognitive computing expertise. PE firms continue to be active and CIP Capital acquired three Fintech compliance firms to create a global Regtech platform. Other niches with deals include trucking, insurance and even cannabis.

For the companies that are building solutions in this sector and have demonstrated scale, it is a good time to be thinking about M&A. The breadth and diversity of regulatory impact across jurisdictions and industries makes the acquisition of companies with point solutions and specific domain expertise a particularly important part of this ecosystem.  Larger players will be actively looking to add the necessary pieces needed to stay relevant and competitive. M&A is typically the quickest and most efficient option and the expectation is that activity in this sector will remain strong.

Regtech is just one of the trends that we are focusing on for 2018.  So many of our trends for this year overlap and show how valuable some companies can really be.  Take a look at our Top 10 Disruptive Trends for 2018 and see if you should be considering making a move towards your own exit in the tech M&A space.