By the stats, your slowing

More than a sensation. Pitchbook and the National Venture Capital Association report that venture companies are raising and deploying less money than in prior years.

What to know: U.S. transaction count has dropped 25% since the first quarter of last year. Between January and March, less than 3,000 agreements were closed, which doesn’t seem bad until you know that 2018 was slower (see chart below).

First-quarter late-stage deal value plummeted. According to Pitchbook and the NVCA, late-stage prices have decreased for the seventh straight quarter to $11.6 billion. Recent headlines indicate that the “mega round” is over. The two report 19 late-stage mega rounds in Q1 2023, down from 98 in Q1 2022.

Such slowdown, or right-sizing, has had rippling consequences. The groups found that the median late-stage, pre-money value plummeted 16.9% from the 2022 full-year number to $54 million in the first quarter, while the average fell by more than $100 million to $159 million.

Both parties are squeezing the sector. According to the latest data, 99 venture capital funds closed $11.7 billion in the first quarter of this year, with bigger vehicles raising most of the money and NEA alone raising $6.2 billion across two new funds in January. Last year, 36 venture funds closed on $1 billion or more, compared to two this year.

VC portfolio businesses are locked in exit purgatory as cash commitments decrease. In the first quarter, the NVCA and Pitchbook reported $5.8 billion in exit value, less than 1% of 2021’s total (it was a record year, but ouch). This newest “venture monitor” report notes that “pressure continues to grow inside the ecosystem” as the IPO window closes, with only 20 public listings in the first quarter.

The groups will provide further statistics next week. You may view some of these numbers here.