For one, fundraising is on track to hit a new record by the end of 2022—meaning limited partners don’t seem too dissuaded by valuations coming down (whether it be by formal downrounds or pro-active portfolio markdowns). Sectors like energy and health care are offering some resiliency (woohoo!).

But many later-stage, unprofitable companies are struggling to adjust to the market’s new priorities. Macroeconomic trends are making it harder for consumer startups to keep up—especially in a market where VCs say direct-to-consumer just isn’t as appealing anymore. Even at the seed stages, founders tell me they’re struggling to pick up traction from investors they are pitching. VCs want to see a business plan that is more hashed out. They want more signs of traction.

A new report from KPMG digs into some of these trends and sheds some light on the changes playing out in the market. Here are three important themes to keep in mind:

Corporates are pulling back

We’ve seen this before. To refresh your memory, corporates lost billions on their venture investments during the Dot Com Bubble and started pulling back significantly from the venture space. Microsoft, for instance, had $5.7 billion disappear off its balance sheet during the first nine months of 2001 due to investment writedowns. 

That being said, the corporate pullback isn’t all that bad this time around, comparatively speaking. Corporates invested $40.5 billion into startups around the globe in the three months ending in September, according to KPMG, down from $59 billion the quarter prior and down from nearly $100 billion in the third quarter of 2021. But certain sectors, in particular, are still attracting corporate interest.

“In many regions, companies in key sectors—such as energy, automotive, and financial services —are standing at a crossroads, pressured by the need to innovate,” reads the KPMG report. “This is helping to keep corporate VC activity moving, if more conservatively and at a slower pace than in recent quarters,”

And perhaps it makes it a good time to do acquisitions—when valuations are cheap.

Food delivery and consumer-focused companies are losing traction

It’s the trifecta: Inflation is high, interest rates are rising, and talk of a global recession is getting louder. That means that consumer-focused companies that might have boomed during COVID are under closer eye, according to KPMG. Which companies will really be able to survive during the macroeconomic challenges we are seeing now?

Just yesterday, Bloomberg reported that GoPuff had let go of up to 250 people in yet another round of layoffs. Food delivery company Just Eat Takeaway has increased its restaurant commissions in Europe and cut jobs in France, while Uber Eats and Deliveroo have exited markets.

Energy, health care, and biotech are picking up momentum

Some sectors are showcasing resilience. Energy, ESG more broadly, health care, and biotech are holding their own. (You can read Fortune’s recent report on the top VCs in health tech here.) Part of that is major deals that have happened in the third quarter (i.e. vehicle infrastructure company TerraWatt raising more than $1 billion, or power development company TerraPower raising $750 million, for instance). But there are still some broader forces at play, according to KPMG: The population is continuing to age, there are still talent shortages, and health systems are still pretty outdated. None of that is changing, downturn or not. All those indicators are “expected to keep investors interested for the foreseeable future,” according to KPMG. Companies in the telehealth and mental health solutions space, in particular, are still taking off. 

So what’s the takeaway? A slowdown could become our new reality for a while. Rounds will take longer to close, investors will grill down on due diligence and take a second look at those forecasts, and companies will be a bit more conservative when it comes to cash.

See you tomorrow,

Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

- Viome Life Sciences, a Bellevue, Wash.-based digital health company, raised $67 million in Series C extension funding led by Bold Capital Group. 

- Landis, a New York-based renting platform, raised $40 million in Series B funding. Google Ventures led the round and was joined by investors including Sequoia Capital, Arrive, Second Century Ventures, Operator Partners, Signia Ventures, and Team Builder Ventures. 

- Nourish Ingredients, a Canberra, Australia-based alternative protein food technology company, raised $28.6 million in Series A funding. Horizons Ventures led the round and was joined by investors including Main Sequence Ventures, Hostplus, and others.

- Voilà!, a Quebec City, Canada-based cloud platform, raised $13.75 million CAD ($10 million) in Series A funding. Walter Ventures led the round and was joined by investors including Desjardins Capital and Investissement Quebec. 

- Relevize, a Boston-based channel activation company, raised $6 million in seed funding. Insight Partners led the round and was joined by investors including Hyperplane, Newfund, 1984.vc, and Weekend Fund. 

- Magic Games, an Istanbul, Turkey-based mobile games studio, raised $5 million in seed funding. Makers Fund led the round and was joined by investors including Firat Ileri and Hummingbird Ventures.

- OTONOMI, a Brooklyn, New York-based parametric cargo-focused insurtech, raised $3.4 million in seed funding. ATX Ventures led the round and was joined by investors including GSR Ventures, Greenlight Re Innovations, Punja Global Ventures, Altari Ventures, SoundBoard Venture Fund, Blackhorn Ventures, Bering Waters Ventures, REFASHIOND Ventures, and other angels. 

PRIVATE EQUITY

- Vista Equity Partners acquired Avalara, a Seattle-based tax-management software provider, for $8.4 billion. 

- ACA Group, owned by Genstar Capital, acquired Compliance Resource Partners, a Highlands Ranch, Colo.-based regulatory compliance provider for the financial services community. Financial terms were not disclosed.

- Addtronics, backed by Kaho Partners, acquired Dynamic Design Solutions, a Charlotte, N.C.-based robotic automation systems provider. Financial terms were not disclosed. 

- Snow Peak Capital acquired Dalco Nonwovens, a Conover, N.C.-based nonwoven fabrics manufacturer and supplier, and Global Felt Technologies, a Union, S.C.-based nonwoven fabrics manufacturer and supplier. Financial terms were not disclosed.

- The Riverside Company acquired a majority stake in Newbridge Software, a Newport, U.K.-based electronic point of sale software company for bars, restaurants, and the hospitality industry. Financial terms were not disclosed.

EXITS

- Odyssey Investment Partners agreed to acquire Magna Legal Services, a Philadelphia-based litigation support services provider, from CIVC Partners. Financial terms were not disclosed. 

OTHER

- B. Riley Financial acquired Targus, an Anaheim, Calif.-based consumer and enterprise productivity products manufacturer and seller, for approximately $250 million.

- New York Sports Club acquired Fhitting Room, a New York-based boutique fitness brand. Financial terms were not disclosed.

IPOS 

- Synergy CHC, a Westbrook, Maine-based consumer health care, beauty, and lifestyle products provider, withdrew its plans for an initial public of $69 million.

PEOPLE

- Vision Ridge Partners, a Boulder, Colo. and New York-based real assets investment firm, hired Jules Kortenhorst as a partner. Formerly, he was with RMI.