The second quarter is upon us, which means that the Crunchbase News crew is cranking away at compiling a volume of information about the first quarter venture market. We’re shaking things up this cycle, as our quarterly reporting organically grew in size and scope over the past two years.

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This time, expect a slightly simpler presentation of data that we hope is both more digestible and actionable.

But that’s all to come. Today, we’re doing an overview of what we’re seeing in the first quarter. Consider this a snapshot, a premonition, an appetizer before the main course.

The Lead-Up

A few words of context before we begin. We live in active times. The venture market has set a number of records in recent quarters, and yearly totals have become staggering. We’ve seen the rise of supergiant rounds and growth in the hypergiant as well.

The proliferation of unicorns continues, even as their number reaches into the hundreds. Late-stage money has been hot domestically and internationally, with China and the US battling for supremacy (more on that shortly).

The other side of this particular coin is the fact that women-founded ventures are still dramatically under-funded, despite the boom. And there are some signals at the seed and early-stage that aren’t as positive as the late-stage market. But the climate, overall, has been a hot-to-boiling for years now.

That may be changing.

Q1 Headline Numbers

Looking at our first cuts of data from the first quarter venture market, and peeking into our projections, a few things become plain. Summarizing, venture capital is still warm around the world, just not as hot as it was in 2018.

It’s too soon to call Q1 2019 a trend. What the data makes plain is that while there is plenty of activity and dollar volume in the global venture market, it’s slipping. For example, Q1 2019 global venture round counts are down from levels set in Q4, Q3, and Q2 of 2018. Compared to the year-ago quarter, Q1 2019 managed to pick up a few hundred more total rounds, but the highs sets in mid-2018 are now firmly behind us.

The story is the same with dollar volume, though more sharply. Total global venture dollar volume in Q1 2019 managed a small increase compared to its year-ago period while falling short of each intervening quarter. The gap between Q1 2019 and the final three quarters of 2018 are stark in dollar terms, with the most recent quarter around $9 billion down compared to Q3 2018, to over $17 billion off when compared to Q4 2018. After late-stage money surged throughout 2018, Q1 2019 put up the lowest late-stage figure that we’ve seen in at least four quarters.

So, compared to the year-ago period, rounds are up a little, and dollar volume up a few billion. But Q1 2019 was the smallest quarter that we’ve seen in venture in quarters of time. That’s material.

Supergiant Turbulence

Putting the late-stage decline into context, we’ve prepared a chart for you. The following graphic shows running counts of supergiant ($100 million and greater) funding events in the US, China, and the rest of the world.

A quick point of order before you dive in–the individual data points are set in circles; the lines themselves are a two-quarter moving average.

China hasn’t been so close to the rest of the world since late 2015, making Q1 2019 all the more interesting. Indeed, given that we noted above that late-stage money had slowed, it appears that China’s rapid decline in supergiant-volume could be the key mover.

Recall that China’s economy is slowing, debt-fears remain, and the country’s stock market took a hit in 2018. As such, seeing a slowdown in the country’s largest venture bets isn’t too surprising. The scale of the decline, however, may be.

What’s Ahead

It’s easy to look at the data (more to come in three days, hang tight) to state that because dollar and deal totals are up year-over-year, the venture market is fine. I’d hazard against that sort of thinking.

The venture market is not seasonal in the same way that Amazon’s revenue is, making sequential quarter-fluctuations part of the game. Sure, there are supposedly better and worse times to raise, but to have a first-quarter tally come in as far under a Q4 tally as we are seeing (recall that the dollar volume gap from Q4 2018 to Q1 2019 is more striking than deal volume decline over the same interval) sparks more concern than a modest year-over-year gain can ease.

So the venture market looks pretty good, just not as good as it was before. And the Chinese late-stage market looks especially weak.

More to come!

Illustration: Li-Anne Dias.