Written by: Robert Osborne, Outlier Ventures
Compiled by: AididiaoJP, Foresight News
Summary
Web3 venture capital surged to $9.6 billion, setting a record for the second-highest quarterly total, despite the number of disclosed transactions dropping to only 306 rounds.
Capital concentration is intensifying. Fewer companies are raising more money, with median funding sizes across all stages increasing. Series A funding reached $17.6 million, the highest level in over two years.
Seed round amounts are rising. The median size of seed round funding has jumped to $6.6 million, reversing the decline seen in the first quarter, indicating increased confidence in early-stage capital.
Private token sales remained stable, raising $410 million through only 15 transactions. Public token sales fell by 83%, with only 35 activities raising $13.4 million.
Infrastructure continues to dominate, with cryptocurrencies, mining and validation, and computing networks leading in capital and investor interest.
The consumer category shows a glimmer of vitality, especially in financial services and marketplaces, but the funding sizes and transaction shares remain relatively small.
This quarter's funding trends show that this is no longer a game of casting a wide net, but rather very thorough conviction investing.
Market Overview: Capital Concentration
At first glance, the numbers seem contradictory: total Web3 venture capital surged, but the number of transactions plummeted. However, in the broader context of adjustments we have tracked since 2024, the logic becomes clear: investors are shifting from broad coverage to deeper, more strategic bets, and Q2 2025 solidified this shift.
Figure 1: Quarterly statistics of Web3 transaction numbers and funding amounts, Source: Outlier Ventures, Messari
This quarter recorded only 306 disclosed transactions (transactions with published funding details): the lowest level since mid-2023. However, funding amounts surged to nearly $10 billion, up nearly 30% from the previous quarter, but without any super-sized outliers. We did not see a single large transaction distorting data; instead, we saw dense rounds of funding ranging from $50 million to $250 million, concentrated in strategic areas such as Rollup infrastructure and validator liquidity. The notable feature of this quarter's funding is fewer bets, larger rounds, and higher thresholds.
The result is that the market feels smaller, but also more serious. In an environment after super-sized funds, investors are not chasing every funding pitch; they are taking a comprehensive view of narratives, protocol dependencies, and distribution advantages. You no longer receive funding for being promising, but for being indispensable.
The transaction stages of funding for Web3 startups: Series A returns
After being overlooked for a year, Series A funding has regained focus.
The median for Series A funding has climbed to $17.6 million, the highest level since early 2022, with 27 transactions raising a total of $420 million. These are no longer 'quasi-Series B' fundings disguised as Series A; they are precise and prudent allocations of capital to companies with strong product-market fit (PMF), which typically have growing revenues and well-structured token mechanisms.
Figure 2: Quarterly changes in median funding sizes for pre-seed, seed, and Series A stages, Source: Outlier Ventures, Messari
Seed rounds have also seen a rebound, with the median size of seed round funding rising to $6.6 million, while the total number of transactions has slightly increased. This indicates a return of investor interest in early-stage risk, at least in popular areas such as AI-native infrastructure or validator tools. Meanwhile, pre-seed rounds remain stable, with a median of $2.35 million, confirming what we have observed over the past year: early-stage projects still exist.
In 2024, capital is concentrated at both ends: one end is the optimism of pre-seed stages, and the other end is the maturity of Series B and beyond. Series A used to be a place where belief faded, but the risk market will not remain stagnant forever. Building infrastructure takes time, and scaling also requires time; that moment has now arrived.
Infrastructure investment dominates Web3 capital flows
This quarter's capital-weighted map of Web3 categories resembles a blueprint for post-consumer transformation.
Figure 3: Average sizes of funding stages and rounds for various categories in Q1 2025. Source: Outlier Ventures, Messari
Note: 'Investor transactions' refer to the total number of times investors participated in a given category, not the number of independent investors. If an investor participated in three financings, it counts as three investor transactions.
The largest funding sizes occur in infrastructure (median $112 million), mining and validation (median $83 million), and computing networks (median $70 million). These are not speculative tokens, but rather infrastructure supporting validator networks, modular blockchain space, and AI-aligned consensus systems, defining long-term blockchain investment strategies. The logic for investors is clear: support the underlying infrastructure, then swiftly develop the application layer.
Other prominent infrastructure sectors include consumer infrastructure (median $11.7 million) and asset management (median $83 million). These categories sit at the intersection of infrastructure and user experience (UX), representing highly functional products with technical depth and long-term composability.
On the other hand, developer tools have once again attracted strong capital interest (91 investor transactions), but the funding amounts are smaller. This is a familiar narrative for this long-tail, low capital expenditure industry. But it remains a playground for early teams willing to engage in grant and token option games.
Financial services, entertainment, and marketplaces have achieved healthy transaction numbers and moderate median funding sizes (ranging from $6 million to $18 million), indicating that investors maintain stable and cautious attention. However, their transaction volumes are far from the levels seen in 2021-2022. Investors have not lost interest in consumer applications; they are just waiting for new products to emerge.
Token financing in Q2 2025: Private vs. Public
Following a booming first quarter, token financing in the second quarter entered a calmer phase, but this shift feels more like a redistribution than a retreat.
Figure 4: Comparison of private and public token sales from 2022 to 2024 in terms of funding amounts and transaction numbers, Source: Outlier Ventures, Messari
Private token sales raised $410 million through only 15 transactions, with a median funding size of $29.3 million, the highest level since 2021. The growth of these high-value private allocations highlights the current funding environment in Web3: consistency and strategic partnerships are more important than hype. These are not meme coins driven by hype or utility tokens disguised as agreements; instead, validator alliances, L2 treasuries, and modular Rollup ecosystems are quietly consolidating liquidity.
In contrast, public token sales collapsed. Only 35 financings were completed, compared to 112 in the first quarter, raising only $13.4 million, with the median funding size halving. Even issuances popular among retail investors struggled to attract attention, with most transaction volumes concentrated in a few high-profile projects. Beyond that, market sentiment feels more like a wait-and-see stance rather than bearish, a posture of waiting and watching rather than a complete retreat.
The divergence between private and public sales has continued the trend tracked since the end of 2023. Public token offerings surged during the market heat, but private rounds reflect consistency rather than hype.
Conclusion
Investors are looking for clearer narratives, more solid infrastructure, and builders who know how to navigate this new funding environment.
If 2024 is the year of recovery and restructuring, then Q2 2025 feels like a year of silent execution.
Capital is flowing, but only to a few. Transaction flows are decreasing, but funding sizes are increasing. Infrastructure continues to win, but not out of bias; there has been no major ideological shift.
For founders, the road is narrower but not unviable; early transactions are still happening, and Series A funding has returned. As long as they align with strategic, scalable, and protocol-dependent goals, private tokens have once again secured a real seat at the negotiation table.
In short: we have moved away from a hype cycle across the entire market. This is a slow, pressurized climb aimed at those essential infrastructures and enduring applications.
The conclusion is simple: this market does not need more hype cycles; it needs inevitability.