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As global VC deals took a major hit in the first quarter of this year, investors are still willing to place big bets on promising startups despite the overall decline in deal activity, a new report showed on Wednesday.

A total of 4,143 VC funding deals with disclosed funding value were announced globally in Q1 2023, which is a decline of 42.1 per cent compared to the 7,158 announced deals during Q1 2022, according to GlobalData.

The number of low-value VC deals (investment less than or equal to $10 million) announced globally witnessed a decline of 36.9 per cent from 4,685 in Q1 2022 to 2,954 in Q1 2023.

Meanwhile, the number of VC deals valued more than $100 million decreased by a massive 75.1 per cent from 321 in Q1 2022 to 80 in Q1 2023.

"Although the number of big-ticket deals is not too high, their comeback during the quarter despite the challenging market conditions is a reason to cheer for promising startups," said Aurojyoti Bose, lead analyst at GlobalData.

The impact in Q1 was more prominent for high-value transactions. This indicates a potential shift in the VC landscape, as investors become more cautious and selective with their investments, revealed GlobalData, a leading data and analytics company.

"High-value transactions were impacted as VC investors remained cautious for committing big investments over the prevailing geopolitical conditions, macroeconomic challenges and recession fears," said Bose.

Despite the decline, low value deals continued to dominate the VC funding landscape by registering the highest number of VC deals announced in this range globally during Q1 2023.

The share of low value deals as a percentage of the total VC deals volume with disclosed funding value stood at 71.3 per cent in Q1.

Meanwhile, VC deals valued at more than $1 billion, which were non-existent in Q1 2022, made a comeback in Q1 2023. The quarter saw the announcement of two VC deals valued at more than $1 billion, said the report.