Strong headwinds and changing market conditions have slowed down initial public offerings, according to a first-look release from PitchBook-NVCA ahead of its quarterly Venture Monitor report next week.

The release early Wednesday details, to no one’s surprise, that the first three months of 2022 have brought a change in the U.S. venture market. Changes — including volatile public markets, interest rate hikes and the war in Ukraine — have caused the market to shift away from what is described as its constant “up-and-to-the-right” movement.

The result of these changes is a significant decline in the number of IPOs in the quarter, at a time when the number of unicorns, startups with a valuation of at least $1 billion, has grown to more than 1,000. The change in interest rate policy by the Federal Reserve was found to be a primary driver. Years of near-zero interest rates have fostered investor interest and activity in private markets, but those days are coming to an end.

PitchBook suggests that as a result of the headwinds, the market is entering a time of uncertainty and will be a much different market to what it was prior to the global financial crisis or the dot-com bubble.

Alhough IPOs may be down in the quarter, venture capital investment data offers mixed results. First financings in the quarter closed at a near-record pace, nearly 200 VC mega-deals (rounds of $100 million or more) were completed and the proportion of completed deals with corporate venture capital participation set a new quarterly high.

However, the report does warn that certain areas of the VC market will soften in the months ahead compared with the last few years of record growth.

Valuations on VC exits have come to a “pause” in the quarter on the back of poor public market performance for growth assets. With IPOs having come to a near halt during the first quarter and special-purpose acquisition companies only faring slightly better, the report notes that the longevity of this quiet period will be critical to the health of the VC liquidity environment in the coming months.

This quiet period is also starting to reflect on late-stage deals. Deal sizes and valuations dropped in the quarter thanks to market conditions. It’s predicted that this will affect VC deal value going forward after years of record investment.

The only solace for the VC market going forward is that the amount of money flowing in VC funds hasn’t declined: The quarter saw $70 billion in commitments. According to PitchBook, that should help further insulate the venture market from immediate major disruption.

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