Once upon a time -- say last year -- Silicon Valley was intent on breeding unicorns.
The tech hub's venture capitalists were investing so much money in startups worth at least a billion dollars that a baby one-horned horse was born every four days. They often had cute, if difficult to interpret, names, like Twilio, Sprinklr and Zscaler.
Now the mythological baby boom is coming to its end.
Venture capitalists, no longer convinced an app for everything will make them money, pulled back on investing in technology startups during the first three months of the year. Funding fell 8 percent to $25.5 billion, extending a steep decline that began the quarter before, according to a report released Wednesday by KPMG, an accountancy, and CB Insights, a venture researcher.
Worse for would-be unicorns: there's no evidence the situation will change anytime soon.
"There's a lot of cautiousness out there," says Kerry Wu, an analyst at CB Insights. "It's reflected in the data."
Here are four takeaways from the report:
Unicorns are breeding like pandas.
Only one new unicorn was created in North America during the first three months of the year, down from seven a quarter earlier and 17 the quarter before that.
A similar trend took place in Asia, where the number of new unicorns was halved to 3.
Some startups are still getting fat.
Magic Leap, the secretive augmented reality developer, raised $794 million. Oscar Health Insurance Co. and would-be unicorn Flatiron Health, both medical-related startups, collectively raised almost $600 million.
Let's not forget the giants of the on-demand economy Uber and Lyft. They raised $200 million and $1 billion, respectively.
American funding cools
The total number of venture deals flatlined in the first quarter after plunging 15 percent a quarter earlier. The stagnation -- deal volume fell by 2 percent -- suggests venture capitalists aren't enthusiastic overall.
Total funding, however, rose 6 percent to $14.8 billion. But that's still almost 30 percent below the September quarter level.
A less Golden State
Startups in California, home to Silicon Valley, failed to dazzle investors. Funding fell to $6.8 billion from $6.9 billion. Sure, that's just 1.5 percent. But it's down almost half from the $12.2 billion raised in the September quarter.
Of course, not everyone is worried.
Chris Thornberg, a founding partner at forecaster Beacon Economics, says startup funding might slow, but that's not a problem because corporate profits and consumer spending -- drivers of the tech economy -- are "doing fine."
"Silicon Valley should be nice and stable," Thornberg said. "The only thing these numbers tell me is that the financial markets freaked out for some reason."
Still, the latest data only bolster the argument the tech economy has begun slowing after years of exponential growth. Even once-dominant sectors, like on-demand, have felt the pressure. Spoonrocket, a Bay Area food delivery company shut down this year, while Sidecar, an Uber rival, closed doors.
Others are settling for a dreaded down round in which funding comes at a cheaper valuation. DoorDash, an on-demand food delivery service, raised $127 million but at a lower price than its previous round.