2024 Web3 Funding Report: Public Sales Account for Over 80%, Retail Investors Band Together

Since March 2024, the cryptocurrency market has experienced a significant pullback, with most altcoins (excluding Bitcoin, Ethereum, and similar tokens), especially some mainstream altcoins, dropping more than 50% from their peak. However, newly listed tokens have remained largely unaffected. Through the study of over 2,000 token issuance cases, we found that early-stage projects with fundraising amounts in the millions have seen their native token prices remain stable, exhibiting independent trends from the broader market.

Funding Scale and Maturity of Sectors

Web3 itself is not an industry but a technological stack transforming all industries. Additionally, no two Web3 sectors are identical, as founders‘ backgrounds and the blockchain solutions they provide vary. As a result, different sectors in Web3 have diverse capital requirements. To clarify capital needs across sectors, we combined funding size with each sector’s stage of fundraising, from early 2024 to August 11, and produced the following chart:

• X-axis: Stage of project fundraising.
• Y-axis: Average amount raised by projects.
• Bubble size: Represents the number of fundraising events per project.

The chart is divided diagonally into yellow and blue areas, with blue indicating sectors with lower fundraising, and yellow representing capital-intensive sectors.

Token Funding

We analyzed 375 projects between the start of the year and August 11. These projects either employed a mix of public and private token sales or raised funds using non-stablecoins.

Over the past year, 375 tokens were listed, of which 70 were through private sales, and 305 through public sales. By correlating the number of token listings with the rise and fall in altcoin market cap, we observed a positive relationship: when altcoin market cap is on the rise, the number of token listings sharply increases the following month. The past few months have seen a decline in activity, attributed to market performance and holiday periods.

Further observation revealed that the number of token listings, especially via private sales, is positively correlated with market trends. This is expected, as public sales usually require more preparation time, which may result in missed market opportunities.

We also analyzed the funding methods for projects. Among newly listed tokens, about 81% were public sales. No sector had more private sales than public sales this year.

On the X-axis, the left side represents private sales, and the right side shows public sales, while the Y-axis displays the median funding amount. The bubble size indicates the number of token listings.

GameFi projects lead with 82 listings, followed by exchange projects (44), DeFi yield protocols (19), and metaverse projects (19). These four sectors dominate token issuance this year.

Traditional Venture Capital

We examined 1,919 fundraising rounds across various stages, leading to several conclusions:

• Seed rounds are the most active stage, followed by accelerators and pre-seed rounds. As tokens list, the gap between pre-seed and seed rounds narrows.
• As the market cycle heats up, ecosystems are emerging, and the number of projects incubated by accelerators is increasing.
• So far in 2024, we recorded the average funding size for each stage: pre-seed at $2.2 million, seed at $4.9 million, Series A at $19.8 million, and Series B at $51 million.

We further analyzed these figures and found that seed rounds were the most active, followed by pre-seed rounds. Interestingly, fewer companies are distinguishing between pre-seed and seed rounds, as private sales often replace seed rounds.

We also noted a rise in accelerator programs. These incubator projects have grown compared to last year, with many new accelerators emerging in Web3 this year. However, there is a discrepancy in the number of grants reported, which we believe is underestimated by an order of magnitude. Hence, grants are not considered part of fundraising.

Marking the fundraising data produced the chart below. It is relatively common for projects to choose not to disclose their funding amounts. However, if the sample size is large enough, we can infer the missing data.

The gray area represents the inferred data. To minimize the impact of outliers, we used a conservative method, calculating totals using a combination of medians and averages.

Using the above charts, we estimated the average funding amount for each stage this year by dividing the total amount raised by the number of fundraising rounds. While the result isnt perfectly accurate, it aligns with our analysis provided to industry peers.

Finally, we examined how funding amounts for pre-seed, seed, and Series A rounds have changed over time. The data shows that despite market volatility, the size of pre-seed and seed rounds is relatively unaffected, as early-stage projects focus on innovation.

In contrast, Series A rounds are closer to or at the token generation event (TGE) stage, requiring projects to prove product-market fit. Market downturns usually have a greater impact on later-stage investments, leading to reduced activity and funding size, as seen in 2022.

The increase in early-stage funding (since January 2024) may indicate that investors believe the market is transitioning from the end of a turbulent cycle to the early stages of recovery, fueling a strong start to the year for the fundraising market.

Data Adjustments

Key insights:

• Token listings are often synchronized with seed, Series A, and strategic fundraising rounds.
• The most common fundraising combination in a short period is accelerator + seed round. Many participants join projects shortly after or during a new fundraising round.

We reported all fundraising data for the crypto industry from the start of 2024 to date. However, there were some challenges in data collection, which we will now address.

In our dataset, 1,392 companies simultaneously registered their fundraising information across multiple channels. Two scenarios arise:

• Companies raised multiple rounds of funding within a year.
• Companies conducted both traditional venture capital and on-chain token fundraising simultaneously.

The most common fundraising combinations are listed below. Accelerator + seed round is the most common, as accelerator programs help de-risk business models, and companies often join while preparing for pre-seed or seed funding. We also observed public token sales combined with strategic or seed funding, usually around or before the TGE stage. This year, only four companies completed seed and Series A rounds simultaneously.

We emphasize these trends to inform project founders that non-traditional fundraising structures are not uncommon. We strongly encourage founders to consider combining traditional equity funding with token sales.