Web3 fundraising in 3Q35 hit a new cycle high: almost $22 billion deployed across all stages and 376 disclosed deals. The market committed more than double than the last quarter, but it did not add proportionally more deals. Capital outpaced deals, which tells us the quarter was driven by larger cheques rather than a surge in activity.
3Q25 continues the pattern we saw in 1H25, conviction over coverage, but it also adds a distinction. The institutional channels that matter for crypto now (ETFs, DATs, tokenization, settlement rails) moved from promising to operational, and the funding mix followed those rails. That is what makes 3Q25 feel different from 1Q25 and 2Q25: not only is capital concentrated; it is concentrated where institutions can deploy at scale.
Author: Robert Osborne | X | LinkedIn | Substack
Market Overview: Capital Concentration and Institutional Pull
Across all stages, capital deployed rose 113% quarter-on-quarter, from $10.2 billion in 2Q25 to $21.7 billion in 3Q25. The number of disclosed deals increased 22%, from 309 to 376. This produced a record for dollars raised, eclipsing even the halcyon days of the 2021/2022 bull run, without a matching broadening of participation.
Figure 1: Web3 Deal Count and Capital Fundraised by Quarter, 1Q18 to 3Q25. Source: Outlier Ventures, Messari.
Messari describes the 3Q25 in similar terms: more capital, fewer deals, and a heavy skew towards the largest transactions and public-market routes such as the Bullish and Figure listings. They also showed that the ten largest raises represented about half of total quarterly fundraising, a reminder that renewed capital flows have yet to translate into a wider recovery in venture appetite.
An additional note worth highlighting is that 3Q25 was the only recent quarter in which the number of disclosed deals increased even as the total number of deals fell across all stages. This divergence matters because disclosure tends to rise with round size and maturity. Larger, later-stage fundraises are more likely to be announced publicly, while smaller or early-stage rounds often remain private or undisclosed. The shift therefore reinforces the broader pattern of 3Q25: a market where capital became more visible because it became more concentrated.
The Institutional Architecture of Web3 Capital
Institutional rails also deepened. Messari’s Crypto x TradFi review shows that ETH-focused ETFs took in approximately $8.7 billion in 3Q25, surpassing BTC-focused funds. Furthermore, ETH ETF AUM increased by around 170% quarter-on-quarter to $27.4 billion.
Meanwhile, Digital Asset Treasuries (DATs) grabbed about 3.8% of ETH supply in 3Q25. This signals a shift in corporate treasury behaviour. Enterprise actors, from banks to payment networks, moved tokenisation and settlement use-cases from pilots towards production.
Examples of this include JPMorgan’s Kinexys network, which went live for tokenised repurchase agreement settlement. SWIFT expanded its tokenisation trials with major global custodians, including BNY Mellon, Citi, Clearstream, Euroclear, and Northern Trust, testing cross-network settlement of bonds and fund shares onchain. Visa Direct also began processing cross-border payments in USDC. This institutional demand underpins why later-stage projects and infrastructure rounds are seeing larger cheques.
Policy Developments Affecting Web3 Venture Capital
Policy developments reinforced that direction. DBS’s 3Q25 Digital Assets Update argues that 2025 marked a shift from consultation to execution. The report points to the GENIUS Act and other official recommendations as catalysts for stablecoin and tokenisation initiatives in banking and payments. These changes have lowered the regulatory barriers for institutional participation. However, policy is only part of the explanation for why capital remains concentrated in later-stage and compliance-ready infrastructure.
Large financial institutions deploy capital at scale and operate under strict return and governance mandates. Allocating many small cheques across early-stage ventures is operationally inefficient and deviates from their typical investment profile. Institutional investors also work within short delivery horizons. Tangible business outcomes need to be demonstrated relatively quickly, and career risk discourages decision-makers from backing unproven, higher-risk startups.
One way this gap is being addressed is through hybrid models that combine institutional capital with specialist early-stage expertise. Outlier Ventures’ partnership with Morgan Creek exemplifies this approach. It is a collaboration that allows a traditional asset manager to gain structured exposure to early-stage Web3 and crypto ventures. The partnership leverages Outlier Venture’s due diligence, sector knowledge, and portfolio support infrastructure to mitigate risk on behalf of institutional investors. This makes participation in the venture layer more practical and scalable.
For early-stage founders working in areas that overlap with traditional finance, this creates a structural challenge rather than a policy one. The question becomes how to design product architectures, governance frameworks, and compliance pathways that make a project institutionally digestible early on. Therefore, when these projects reach sufficient maturity, the bridge to large capital is already built.
New Crypto/Web3 Venture Funds
Fund formation remained subdued by count but concentrated by size. Only 11 new crypto venture funds were launched in 3Q25, raising a combined $1.3 billion, a continuation of the downward trend observed throughout the year.
Figure 2: Number of Web3 venture capital funds launched and capital raised, 1Q20 – 3Q25. Source: Outlier Ventures. Messari.
In historical terms, the pace of new fund launches now mirrors the environment of mid-2020, when uncertainty around global lockdowns briefly froze new fund creation. The similarity lies not in crisis, but in caution: general partners are increasingly relying on the remaining dry powder within existing vehicles, while limited partners remain selective about committing to fresh mandates. PM Insights’ 3Q25 Secondaries report characterises this as a “recycling phase”: a period when capital circulates through secondary trades and exits, rather than entering the market as new venture formation.
Early-Stage Deals in 3Q25
Early-stage activity did not expand with the headline dollars. Pre-seed fell to a multi-year low in both capital raised and deal count. Seed improved in both deal count and capital raised. Series A also grew modestly in capital fundraised and deal count. Median round sizes based on 12-month running figures show seed pushing to a new cycle high, Series A holding steady, and pre-seed edging down. This points to a funding market that rewards proof and traction more than promise. It also extends the selective bias we documented in our 1Q25 and 2Q25 reports.
Pre-seed Stage Web3 Fundraising
Pre-seed stage recorded 18 disclosed rounds totaling $32.5 million, the weakest quarter for this stage in years. The 12-month running median slipped to just under $2.5 million.
Figure 3: Web3 Deal Count and Capital Fundraised at Pre-seed stage, 1Q18 to 3Q25. Source: Outlier Ventures, Messari.
Messari also reports a pronounced drop in accelerator activity in 3Q25, which helps explain the narrow funnel at idea stage and the higher bar for admission.
Seed Stage Web3 Fundraising
Seed-stage fundraising in 3Q25 reached 71 disclosed rounds totalling just under $663 million, a headline improvement on 2Q25. However, that figure is heavily skewed by Flying Tulip’s $200 million raise, which alone accounts for nearly a third of total seed capital this quarter. Without it, aggregate seed investment would have been broadly in line with previous quarters.
Figure 4: Web3 Deal Count and Capital Fundraised at Seed stage, 1Q18 to 3Q25. Source: Outlier Ventures, Messari.
Flying Tulip’s round was also unconventional in structure. The financing granted investors an on-chain redemption right that secures capital and yield exposure without surrendering upside. This is more akin to callable, yield-bearing capital than traditional equity. The project isn’t deploying the full amount as spendable balance-sheet capital. Instead, it earns DeFi yield on the treasury to fund incentives and buybacks.
As argued in our September 2025 Web3 Fundraising snapshot, Flying Tulip represents a significant commitment from Web3 venture investors. However, it also illustrates their growing preference for liquid, capital-efficient instruments over the illiquid SAFEs and SAFTs that once dominated early-stage fundraising.
Series A Stage Web3 Fundraising
In 3Q25 Series A stage logged 31 disclosed rounds totalling almost $545 million, with the 12-month running median steady around $16 million. There was a preference for clear alignment to institutional rails such as payments, tokenisation, data, or infra services.
Figure 5: Web3 Deal Count and Capital Fundraised at Series A stage, 1Q18 to 3Q25. Source: Outlier Ventures, Messari.
The stability of Series A round sizes, neither contracting nor expanding, could mark the beginning of a broader return of investor appetite for mid-stage ventures. It is too early to call this a shift in trend, but if the same resilience persists into 4Q25, it would suggest that investor caution is slowly giving way to renewed confidence in scaling-stage opportunities.
Capital Investment Across All Stages by Category
Capital composition in 3Q25 was unmistakably institutional. Investment Management, Marketplaces, Data, Financial Services, and Mining & Validation together absorbed roughly 70% of all dollars. These categories connect directly to issuance, custody, settlement, analytics, and blockspace supply. These are the areas most amplified by ETF/DAT inflows, tokenization programs, and enterprise adoption.
Figure 6: Capital Raised and Deal Count by category in 3Q25. Source: Outlier Ventures, Messari.
Within Investment Management, very large rounds reflected demand tied to ETFs, DATs, and other regulated access products that expanded materially in 3Q25. According to Messari, ETH ETF inflows exceeded BTC ETF inflows, and ETF/DAT vehicles grew their share of ETH and BTC held. That structure creates a durable buyer base for the related infrastructure and services, which is why ticket sizes skews so large in the data.
Data infrastructure also raised substantial sums with high medians, consistent with late-stage and strategic cheques into indexing, analytics, and AI-adjacent stacks. Grayscale’s sector report formalised AI-crypto as a distinct investable segment this year, which helps explain why dollars clustered in a handful of scaled data platforms rather than a long tail of “AI + chain” experiments.
Financial Services and Marketplaces map cleanly to the tokenization and payments arc. DBS highlights tokenisation and stablecoins as 2025’s fastest-moving institutional track. Regulated flows, settlement rails, and RWA marketplaces attracted more marginal dollars than consumer-facing projects. For example, Metaverse & Gaming and Wallet/Security were peripheral in 3Q25. Funding favoured rails over retail, where revenue and compliance are legible.
Token Fundraising in 3Q25: Private vs Public
Token issuance shifted back toward public routes. Public token sales climbed to 47 events totalling $819 million, while private token sales fell to 7 events totalling $331 million. In quarters when market depth improves and policy risk recedes, teams often prefer public distribution for price discovery and community alignment. CoinGecko’s 3Q25 report shows both market capitalisation and trading volumes rising, which supports this shift. Messari also notes a broader return of public-market participation, with IPOs and listings re-emerging as indicators of market health. As Tiger Research puts it, IPOs allow Web3 firms to treat the listing process as a “regulatory-compliance certification mark” for institutional capital access.
For most early-stage founders, however, the prospect of an IPO remains distant. An IPO is rarely a realistic exit in the current environment, given the scale, maturity, and timing required. Rather than a tangible goal, the reopening of the IPO window functions more as a market sentiment marker. It is a sign that public markets are once again receptive to crypto exposure, even if only a handful of companies are positioned to seize it.
Figure 7: Comparison of Private and Public Token Sales by Capital Raised and Deal Count, 1Q25 – 3Q25. Source: Outlier Ventures, Messari.
Private Retreat, Public Rebound
This represents a departure from early 2025, when private token sales briefly emerged as the steadier institutional route to liquidity. As Figure 7 shows, private activity declined steadily through the year: both capital raised and deal count fell from 1Q25 to 2Q25 and continued downward into 3Q25.
In contrast, public token sales followed a sharper cycle. From 1Q25 to 2Q25, both capital raised and deal count fell sharply, marking one of the steepest quarterly drops in recent years. CoinGecko’s Q3 2025 Crypto Industry Report attributes much of this mid-year slowdown to regulatory uncertainty in the United States and Europe, as several projects delayed launches pending clarity on token classification and exchange approvals. DBS’s 3Q25 Digital Assets Update offers a complementary view. After the early-year surge of activity following ETF approvals, investors temporarily rotated capital into stablecoins and yield-bearing assets.
In this way, they reduced their risk exposure to new token issuances. From 2Q25 to 3Q25, capital rebounded strongly without a corresponding rise in deal count. In effect, the public market revived in value, not in breadth. This was driven by a handful of large, higher-profile offerings rather than a reopening of the token fundraising landscape.
Final Thoughts on Web3 Fundraising in 3Q25
3Q25 continued a trend seen in previous quarters. More capital flowed through narrower, deeper channels anchored to institutional adoption. Early-stage deals remained selective. Series A was accessible for teams with traction and institutional adjacency. The largest cheques went to investment platforms, settlement rails, data infrastructure, and blockspace.
This matters because the convergence of crypto and traditional finance is no longer hypothetical. Instead, it has become the assumption shaping allocation. ETFs and DATs channel large, persistent flows into the asset class, whilst tokenisation and stablecoins give enterprises usable settlement rails. A16z crypto, in its State of Crypto 2025 report, described 2025 as “the year crypto went mainstream.”
In practice, however, this mainstreaming has occurred at the infrastructure layer rather than the consumer layer. This is a trend we previously highlighted in our report, Web3 Fundraising in Focus: The Truth Behind Consumer vs Infra Investment. The greater focus since 2024 on Web3 infrastructure projects has been reshaping how finance operates, without visibly altering how most people interact with it. Banks and payment providers are adopting stablecoin rails and tokenised settlement layers, yet the end-customer experience often looks unchanged.
This quiet integration may not match the popular vision of mass crypto adoption, but it represents a sustainable route by which blockchain truly embeds itself in the financial system. As a result, capital today is being deployed toward projects with measurable utility and regulatory alignment, rather than the speculative consumer experiments that defined earlier cycles.
Challenges in Upcoming Quarters
Looking ahead, the practical question for founders is how to convert today’s selective seed into tomorrow’s confident Series A. What is clear already is that investors are looking for real products with real traction. This means working deployments, user adoption, and demonstrable integration into regulated or enterprise contexts. Proof points, not promises, will carry the next wave of early-stage rounds.
For VCs, the challenge is whether fund design and follow-on strategy can bridge a thin pre-seed funnel into a healthier 2026 pipeline. And for institutions, the question is what needs to change to bring significantly more new capital back to early-stage projects. This might involve co-investment programmes linked to corporate procurement or matched-grant schemes that de-risk go-to-market. Eventually, this could develop into new equity–token hybrid frameworks that balance liquidity preferences with long-term alignment. The latter will likely become a topic in its own right as investor preference around capital structure continues to evolve.
Those answers will determine whether the market in 4Q25 and 1H26 merely stays concentrated or starts to broaden, a test of how far this cycle’s liquidity can reach.
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