Author: Robert Osborne, Outlier, Ventures
Compiled by: AididiaoJP, Foresight News
Summary
Web3 venture capital surged to $9.6 billion, marking the second-highest quarterly total on record, despite the number of disclosed transactions falling to just 306 rounds.
Capital concentration intensifies. Fewer companies are raising more money, with the median size of funding rounds 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 Q1, indicating increased confidence in early-stage capital.
Private token sales remain stable, raising $410 million through just 15 transactions. Public token sales fell by 83%, with only 35 activities raising $134 million.
Infrastructure continues to dominate, with cryptocurrency, mining and validation, and computing networks leading in capital and investor interest.
The consumer category shows a glimmer of vitality, particularly in financial services and marketplace sectors, but the funding scale and transaction share remain relatively small.
This quarter's funding trend shows that this is no longer a game of wide nets, but a very thorough investment of belief.
Market Overview: Capital Concentration
At first glance, the numbers seem contradictory: total Web3 venture capital has surged, but the number of transactions has sharply declined. However, in the broader adjustment context 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 counts and funding amounts, Source: Outlier Ventures, Messari
This quarter only recorded 306 disclosed transactions (transactions with disclosed funding details): the lowest level since mid-2023. However, funding amounts surged to nearly $10 billion, nearly 30% higher than the previous quarter, but without any mega-scale outliers. We did not see a single mega-transaction distorting the data; instead, we saw a concentration of rounds between $50 million and $250 million in strategic areas such as Rollup infrastructure and validator liquidity. This quarter's funding is characterized by fewer bets, larger rounds, and higher thresholds.
The result is that the market feels smaller, but also more serious. In an environment following mega-funds, investors are not chasing every funding pitch; they are comprehensively considering narratives, protocol dependencies, and distribution advantages. You no longer receive funding because you are promising, but because you are indispensable.
Funding stages for Web3 startups: Series A returns
After being overlooked for a year, Series A financing has returned to the spotlight.
The median size of Series A funding rose 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' financings disguised as Series A; they represent precise, prudent capital allocations to companies with strong product-market fit (PMF), typically with growing revenues and well-designed token mechanisms.
Figure 2: Quarterly changes in the median size of seed pre-round, seed round, and Series A funding, Source: Outlier Ventures, Messari
Seed rounds have also rebounded, with the median size of seed round funding rising to $6.6 million, while the total number of transactions increased slightly. This indicates a return of investor interest in early-stage risk, at least in hot areas like AI-native infrastructure or validator tools. Meanwhile, pre-seed rounds remain stable, with a median of $2.35 million, confirming what we have seen over the past year: early-stage projects still exist.
Capital in 2024 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 was once a place of dwindling belief, but the risk market will not remain stagnant forever. Infrastructure takes time to build, and scaling also takes time; that moment has now arrived.
Infrastructure investments dominate Web3 capital flows
This quarter's capital-weighted Web3 category map resembles a blueprint for post-consumer transformation.
Figure 3: Average size of funding stages and rounds by category in Q1 2025. Source: Outlier Ventures, Messari
Note: 'Investor transactions' refers to the total number of times investors participated in a given category, not the number of independent investors. If one investor participated in three financings, it counts as three investor transactions.
The largest funding sizes occurred in infrastructure (median $112 million), mining and validation (median $83 million), and computing networks (median $70 million). These are not speculative tokens but infrastructure supporting validator networks, modular blockchain spaces, and AI-aligned consensus systems; this foundational layer defines long-term blockchain investment strategies. The logic for investors is clear: support the underlying infrastructure and then rapidly scale the application layer.
Other prominent infrastructure areas 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 high-functionality products with technical depth and long-term composability.
On the other hand, developer tools have once again attracted strong interest from capital (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 achieved healthy transaction counts and moderate median funding sizes (ranging from $6 million to $18 million), indicating that investors maintain stable and cautious attention. However, their transaction volume is far from the levels seen in 2021-2022. Investors have not lost interest in consumer applications; they are simply waiting for new products to emerge.
Token Financing in Q2 2025: Private vs. Public
Following a booming Q1, token financing in Q2 entered a quieter phase, but this transition feels more like a redistribution than a retreat.
Figure 4: Comparison of private and public token sales in terms of funding amounts and transaction counts from 2022 to 2024, Source: Outlier Ventures, Messari
Private token sales raised $410 million through just 15 transactions, with a median funding size of $29.3 million, the highest level since 2021. This growth in high-value private allocations highlights the current Web3 funding environment: consistency and strategic partnerships are more important than hype. These are not meme coins driven by hype or utility tokens masquerading as protocols; they are validators' alliances, L2 treasuries, and modular Rollup ecosystems quietly consolidating liquidity.
In contrast, public token sales have collapsed. Only 35 financings were completed, down from 112 in Q1, totaling just $134 million, with the median funding size halving. Even retail-favored issuances struggle to attract attention, with most transaction volume concentrated in a few high-profile projects. Beyond that, market sentiment feels more like a wait-and-see rather than bearish; it's a posture of waiting and observing rather than a complete retreat.
The divergence between private and public sales continues the trend tracked since late 2023. Public token issuances surged when the market was hot, but private rounds reflect consistency rather than hype.
Summary
Investors are seeking clearer narratives, more solid infrastructures, and builders who know how to navigate this new financing environment.
If 2024 is a year of recovery and reorganization, 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; no major ideological shifts have occurred.
For founders, the road has narrowed, but it is not untraversable; early deals are still happening, and Series A financing has returned. As long as they align with strategic, scalable, and protocol-dependent goals, private tokens once again have a real seat at the negotiating table.
In short: we have left the hype cycle of the entire market. This is a slow, pressured climb, aimed at those important infrastructures and enduring applications.
The conclusion is simple: this market does not need more hype cycles; it needs inevitability.