Venture capital flowing into technology companies remained strong in the third quarter, according to a latest quarterly PwC/CB Insights MoneyTree report released early Wednesday, but where it’s invested is shifting.

The number of deals in the U.S. during the third quarter dropped for the first time since the fourth quarter of 2017, coming in at 1,229 versus 1,501 in the previous quarter.

Seed-stage deals dropped to 18 percent of all deals in the quarter, down from 26 percent in the second quarter and the lowest rate in several quarters. Meanwhile, the median late-stage deal size fell from $42 million to to $34 million in the quarter.

On the flip side, large rounds into later-stage companies skewed the overall results upward with a record 55 rounds of more than $100 million and six rounds topping $500 million. Some of those deals included money going into late-stage startups such as WeWork Inc. and Uber Technologies Inc.

Record investment also produced a record number of companies becoming unicorns, companies with a valuation in excess of $1 billion, with 16 U.S. companies hitting the mark in the quarter. Total funding in the quarter in the U.S. came in at $27.5 billion versus $23 billion the previous quarter.

Global markets reflected the shifts in the U.S., with $53 billion invested in 3,408 deals, a 2 percent rise in funding as the number of deals fell.

Asia led a slowing market with $19.3 billion in venture capital investments, down 11 percent over the previous quarter while the number of deals remained flat. Forty-eight deals in the region exceeded $100 million, with new unicorns totaling 11.

“The unicorn birth rate picked up in Q3’18 with 16 U.S. startups and 13 Asian companies seeing valuations rise above $1 billion dollars,” Anand Sanwal, chief executive of CB Insights, said in a statement. But he added that although the migration away from seed rounds won’t be felt immediately, “it will have impacts on the venture ecosystem in the coming years.”

Photo: shannonclark/Flickr