May 3, 2017 This article is more than 2 years old.

As India’s startup sector matures and becomes busier, entrepreneurs are finding the money is flowing a little less freely.

In the first quarter of 2017, deal-making slipped 47.45% from the same period a year ago, according to financial research platform VCCEdge’s latest Startup Deal Report, released on May 02. The industry also posted its lowest deal value in 14 quarters, dipping 46% from the previous quarter.

The volume of initial angel and seed investments halved, with 120 deals in the quarter ending in March 2017—compared with 245 deals in the same period of 2016. And Series A funding, traditionally secured right after seed funding to expand the user bases and develop the business, also declined 65% in deal value from a year ago.

However, there’s a silver lining: Later stage funding picked up, with investors looking to more mature startups. Despite the number of Series B deals declining by 16% in the first quarter of 2017, compared to the same period last year, funding value climbed 22%. “A rise in Series B funding even as seed and Series A funding trends show a decline reflects investor cautiousness in early and mid-stage funding and the increasing focus on market-readiness for funding,” VCCEdge’s business head Gaurav Roy said.

The technology sectors most popular with investors were finance, food, travel, health and real estate.

These quarterly results continue an ongoing trend. Funding in India’s startup sector has dropped significantly, from $7.6 billion in 2015 to $3.8 billion in 2016, as big players logged huge losses and saw their valuations erode rapidly. In the last year, the average Indian startup has had to pitch to more than six investors before securing a first funding round. In the two-year period starting June 2014, some 2,281 Indian startups began operations—but 997 of them shuttered, too.

The funding crunch is mostly the result of an oversaturated market. The record fundraising in 2015 was followed by mergers & acquisitions, thinning out the field a little as entrepreneurs began taking these so-called “exit routes.” M&A deals in the startup space saw a 75% quarter-over-quarter jump, the report said. Those deals can also serve as a major source of funding, Roy says.

Businesses shouldn’t lose hope, though. Resilient businesses with strong revenue models and up-to-date technological know-how will continue to attract investors, Roy said.

In the first quarter of 2017, Bengaluru was the prime startup city, accounting for 24% of the deals in the country. The IT capital of India logged a total deal value of $96 million, two-thirds at the seed stage. The Delhi National Capital Region (NCR), which includes the city itself and surrounding urban hubs such as Noida and Gurgaon, saw 38 deals worth $44 million. These are the top five cities by cumulative deal value: