A new report today from Crunchbase Inc. finds that money flowing into venture capital continued to drop in the first quarter as growth investors further scaled back their investment pace amid ongoing worldwide macroeconomic issues.

For the quarter that ended March 31, global funding came in at $76 billion, down 53% from the $162 billion invested in the first quarter of 2022. Excluding two big rounds in the quarter — Microsoft Corp.’s investment of $10 billion into OpenAI Inc. in January and $6.5 billion invested in Stripe Inc. in March — the downturn is even more considerable, with a quarterly figure closer to $60 billion.

The downturn in investment occurred across every funding stage, including seed-stage deals, which despite a broader downturn had previously been somewhat resilient as late-stage funding rapidly slowed. Across various stages, funding was down 44% to 54% year-over-year, with investors scaling back as they took time to assess new investment opportunities while guiding existing portfolio companies.

In the first quarter, seed funding totaled $6.9 billion, down 44% year-over-year, contrasting a rise in seed rounds through most of last year. According to the report, seed funding only started to fall in the fourth quarter.

Although there was a downturn in seed funding, to the surprise of no one who follows tech news there was one segment with an exception: artificial intelligence. With generative AI, the newest hot thing, additional funding flowed into AI startups such as large language models company Fixie.ai Inc., code platform Codium Ltd. and biotech AI startup MoleculeMind.

Early-stage funding dropped 54% in the quarter, to $25.6 billion, reflecting a trend that started in the third quarter of last year. Series B rounds showed a larger decline than Series A rounds year-over-year by amounts, medians and averages.

Late and large-stage funding in the first quarter came in at $43 billion, down from $93 billion in the first quarter of 2022 but up from $34 billion in the fourth quarter. The money raised by OpenAI and Stripe made up 22% of all venture capital raised in the quarter and 38% of late-stage financings.

The collapse of SVB Financial Group Corp., the parent company of Silicon Valley Bank, in March was also found to have added shock to an already weakened funding environment. The bank had more than 20,000 startup depositors with $5 million or less in revenue.

For all that, venture capital firms are not crying poor. The report found that investors in private companies still hold record amounts of dry powder, about $580 billion as of the end of 2022. The figure is similar to that held as of the end of 2021, but the difference last year was that investors were plowing the money rapidly into startups.

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