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When Russian forces attacked Ukraine last month, the U.S. and its allies on doing business with the eastern power, cutting off more than half of Russia鈥檚 high-tech imports and restricting its access to technological inputs.

As those sanctions have been added to on a seemingly daily basis, companies have been left to scramble to make sure they are complying鈥攎any with the help of a sector that is often not talked about but is very much growing.

鈥淭his is not a sexy space,鈥� said , CEO and co-founder of 鈥攚hich leverages AI to create custom compliance models for financial institutions. 鈥淏ut it is hard, especially when you have to do it at a global level.鈥�

Compliance tech鈥攔egtech, as some call it鈥攃an help companies follow rules and laws surrounding the world of finance, health care, privacy and more. As regulations have grown with new laws鈥攕uch as the The European鈥檚 Union’s General Data Protection Regulation鈥攕o has the compliance sector as companies seek to keep up through automation what they once did manually.

鈥淭en years ago, humans could spreadsheet these things,鈥� said , co-founder and CEO of , which curates regulations globally to help businesses with compliance. 鈥淏ut now, even if you are in manufacturing or IoT, you cannot do that.鈥�

More regulations, more money

As regulation has grown, so has investment in the space. While pretty niche just five years ago, investment into VC-backed compliance companies exploded last year鈥攋ust as data and privacy issues were bubbling over.

The sector has seen a steady uptick in dollars invested through the years: Compliance funding jumped from $1.7 billion in 2020 to more than $5 billion last year. It is nearing $1 billion this year after just about 10 weeks.

While the industry has seen more cash, it also has had more to deal with than ever鈥攊ncluding now wide-ranging sanctions due to war spurred on by a superpower.

鈥淲e did see a big increase last week to this week in the number of sales calls,鈥� said Goenka, who added the increase was about 3x.

Regology鈥攚hich raised an $8 million Series A last August鈥攌eeps a database of laws and regulations for more than 30 countries, and tracks more than 4,000 sources around the world daily to keep its customers current on any changes that may affect them.

Goenka said the day after Russia鈥檚 invasion of Ukraine, a fellow company that came out of with Regology called him. The startup has both a Ukrainian and Russian founder.

鈥淭hey were like, 鈥榃hat do we do?鈥欌�� Goenka said.

While many just think about money when it comes to the announced sanctions, Goenka said it’s important to remember it involves much more. For example, the new sanctions can involve a U.S. company that has designed a product that is being built abroad and sold in Russia.

鈥淚t鈥檚 very complicated,鈥� he said.

It鈥檚 only growing

However, complexity is nothing new for those in compliance. As advancements in technology have quickened, so have regulations.

鈥淭en to 20 years ago, the world was simpler,鈥� Goenka said. 鈥淚t was complex, but simpler. But innovation has sped up. Now governments are looking to safeguard their interests.鈥�

Silent Eight鈥檚 platform helps financial institutions make business compliance decisions around onboarding of customers and transactions, and cooperating with authorities when something seems suspicious. The company just closed a $40 million Series B last month.

鈥淭here鈥檚 just so much complexity around this, countries have so many different compliance issues,鈥� Markiewicz said.

鈥淭he world is changing around us all the time,鈥� he adds. 鈥淚t doesn鈥檛 matter if it鈥檚 war or something else.鈥�

U.K.-based helps its users鈥攊ncluding banks and energy traders鈥攆igure out who really is transacting through their platform and making sure those institutions are following their own policies evenly through automation to keep them compliant.

The company just raised approximately $33 million this week in what co-founder called an oversubscribed round.

鈥淲e had a lot of interest,鈥� said Carson of the fundraising process. 鈥淭here鈥檚 so much money in the space because everyone knows banks will adopt it if it solves problems.鈥�

Carson said while the current sanctions add another layer to helping keep companies compliant, they also just really are another illustration of the need鈥攁nd what is becoming the expectation among regulators鈥攖hat companies use technology to keep abreast of the changing regulatory world.

鈥淭here is an increasing expectation that since there is technology available, you should be able to do better,鈥� he said.

With so much money in the compliance space and large publicly traded companies like and 鈥攁s well as private ones including and 鈥攊t is fair to wonder if consolidation may come to the sector.

鈥淚 do think you鈥檒l see consolidation over the next two to three years,鈥� Carson said. 鈥淏anks don鈥檛 want five different tools they have to interpret. They want a platform.鈥�

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