Want Web3 Funding? Here’s What Investors Are Really Looking For

As we navigate through 2025, the Web3 sector continues to attract significant investment, with over $100 billion poured into the ecosystem, according to sources. Despite the challenges posed by the bear market, Web3 funding is showing signs of stabilization, with investors increasingly focusing on promising projects that align with key trends and demonstrate strong fundamentals. For Web3 startups looking to secure funding, understanding what investors are prioritizing is crucial. This article delves into the current state of Web3 funding, highlights the top trends shaping the landscape in 2025, and outlines what investors are really looking for when evaluating potential investments.

Key Trends Shaping Web3 Funding in 2025

The Web3 funding landscape is evolving rapidly, with certain areas drawing the most attention from investors. Based on recent data and trends, here are the top five trends driving Web3 funding in 2025:

1. AI-Driven Web3 Projects
   The combination of AI and blockchain is making AI tools available to more people and allowing data to be shared without needing to trust a central authority. Funding for AI-driven Web3 projects increased by 85% in 2024, reaching $1.8 billion worldwide. Some notable projects include SingularityNET, which raised $25 million, and Fetch.ai, which got $40 million from Outlier Ventures and Bosch Ventures. With a massive $500 billion AI funding announcement in January 2025, this trend is expected to keep growing.

2. Gaming & Metaverse Ecosystems
   The gaming and metaverse sectors are building sustainable ecosystems with real-world utility and revenue models. The market grew from $4.6 billion in 2022 to $12 billion in 2024, with projections exceeding $65 billion by 2030. In 2024, these ecosystems raised $2.5 billion, up from $1.2 billion in 2023. Companies like Mythical Games ($75 million) and Gala Games ($200 million) are leading the charge, showcasing the sector’s potential for long-term growth.

3. Rollups & L2 Protocols
   Essential for scaling Ethereum and reducing transaction costs, rollups processed 45% of Ethereum’s transaction volume in 2024, up from 13% in 2022. Funding for rollups reached $2.6 billion in 2024. Projects like zkSync ($120 million from A16z and Dragonfly Capital) and Arbitrum Foundation ($75 million ecosystem fund) are at the forefront of this trend, addressing scalability challenges in blockchain infrastructure.

4. RWA Tokenization
   Tokenizing real-world assets such as real estate and commodities for fractional ownership is gaining traction. Investments in RWA tokenization grew by 150% in 2024, with $2 billion allocated. BlackRock’s launch of an RWA tokenization fund in late 2024 further underscores the sector’s potential. Companies like Maple Finance ($50 million) and Tokeny ($25 million) are key players driving innovation in this space.

5. ReFi (Regenerative Finance)
   Decentralized solutions for environmental sustainability, particularly through tokenizing carbon credits, are attracting significant interest. Funding for ReFi increased by 220% in 2024, with $800 million allocated. ESG investments are projected to hit $50 trillion by 2030, making ReFi a hotbed for impact-driven investment. Projects like Toucan Protocol ($10 million) and KlimaDAO are making strides in this area.

What Investors Are Really Looking For

When considering Web3 startups for funding, investors are particularly focused on the following aspects (Investor Tips for Web3 Startups):

• Structuring Business
  A finalized MVP with user traction and measurable results is essential. Investors also expect a clear business model and a well-defined go-to-market strategy. Startups aiming for Web3 funding must also demonstrate a clear market fit and strategic positioning. Investors are looking for projects that not only address existing market needs but also have the potential to scale and adapt. The success of platforms like Syky, a digital fashion startup that raised $9.5 million, illustrates the importance of aligning with market trends and consumer interests . Startups are advised to begin with smaller investors, such as business angels, or secure ecosystem grants to build momentum before approaching larger VCs.

• Web3 Experience
  Founders should have hands-on experience in Web3, particularly in areas like decentralized applications (dApps), DeFi (Decentralized Finance), and NFTs (Non-Fungible Tokens). For those new to the space, bringing on a Web3 advisor is highly recommended. Advisors can be found through platforms like LinkedIn, local meetups, major conferences, or online Web3 communities. Moreover, accelerators like Farfetch’s Dream Assembly Base Camp are supporting Web3 startups that focus on digital fashion and immersive experiences, indicating a growing interest in niche markets within the Web3 space

• Team Dynamics
  Investors closely evaluate the team’s adaptability and collaboration skills. Red flags include signs of sunk cost fallacy, ego, or stubbornness, which can deter investment. A cohesive and forward-thinking team is a critical factor in securing funding. Nir Netzer, a VC investor at Tenity, emphasizes the significance of team cohesion:

In early-stage investment processes, evaluators often look at team dynamics over time. This allows investors to assess whether the team is equipped for long-term success

• Transparency
  Team visibility and founder activity are important for building trust. Leveraging personal brand for credibility is especially valuable in the nascent Web3 industry. Additionally, ensuring the security of products and services is paramount to combat fraud. Tools like Kaito AI can assess founder mindshare on social media platforms like X, helping investors gauge transparency.

• User Feedback
  Startups should avoid developing in isolation and instead incorporate iterative feedback loops. Data-led decision-making is essential for crafting a compelling go-to-market strategy. Understanding the target audience from the outset helps in creating pitches that resonate with investors.

Read More: How Web3 Grants Are Creating a New Generation of Decentralised Founders

Recent Funding Highlights

The Web3 sector remains robust, with significant funding activity in Q1 2025. According to Outlier Ventures, $7.7 billion was raised across 603 deals, nearly matching the $7.9 billion raised in Q4 2024. However, the deal count dropped by 34%, indicating a more selective investment environment. Excluding Binance’s $2 billion raise, which accounted for over 25% of the capital, funding was approximately $5.7 billion, aligning with 2024 averages.

Strategic rounds accounted for $2.5 billion across 102 deals, representing 32% of the capital deployed, with a focus on Layer 1 (L1) protocols, middleware, and token infrastructure. Early-stage rounds showed a mixed picture: pre-seed rounds had a median of $2.9 million, remaining strong, while seed rounds hit a two-year low at $4.4 million. Series A rounds were limited to 27, with a median of $15.6 million.

Token raises rebounded sharply, with $1.6 billion raised across 96 sales (69 public and 27 private). Public sales totaled $798 million, led by World Liberty ($590 million), while private sales reached $771 million, with TON ($400 million) leading.

Recent unicorn fundings include Figure ($1 billion), World ($3 billion), Kraken ($4 billion), MoonPay ($3 billion), and LayerZero Labs ($3 billion). Top-valued Web3 startups include Discord ($15 billion), OpenSea ($13 billion), and Alchemy ($10 billion).

Challenges and Opportunities

The Web3 funding landscape is stabilizing post-US election, with VCs seeking promising projects. Technologies like DeFi, AI, and RWA are in a strong position for investment in 2025. However, the market is characterized by capital concentration over volume, with a focus on infrastructure and late-stage bets. There is a bifurcation between early-stage experimentation and late-stage conviction, indicating that startups need to clearly position themselves within these dynamics to attract funding.

Final Thought

For Web3 startups looking to secure funding in 2025, aligning with the key trends, AI-Driven projects, Gaming & Metaverse, Rollups & L2 Protocols, RWA Tokenization, and ReFi—is essential. Equally important is demonstrating strong fundamentals in business structuring, team experience, transparency, and user engagement. By understanding what investors are really looking for and positioning themselves strategically within the evolving Web3 ecosystem, startups can increase their chances of success in a competitive funding environment.