$20 Billion in Investment, Institutional Players, and AI: The New Reality for Web3 Startups

Generis Web3 GTM Agency, the official partner of the European Blockchain Convention and a member of the Startup Battle jury, has published an analytical report titled The State of Web3 Startups 2026. The report cross-references data from Galaxy Research, CV VC, CoinGecko, ESMA, and other industry sources. Its goal is to examine the Web3 market using already published data on venture capital, institutional adoption, tokenization, and shifting B2B buyer behavior.

Taken together, these data points paint a rather contradictory picture. On the one hand, the crypto industry is once again attracting significant capital: Galaxy Research reported $20 billion in venture investments in 2025, the highest figure since 2022. On the other hand, capital is being distributed increasingly unevenly: just 11 deals in Q4 captured 85% of the $8.5 billion invested during that period.

At the same time, the regulated European market is becoming more crowded. As of July 31, 2026, the MiCA authorized CASPs count in the EEA was at 336. And potential clients are increasingly beginning their search for providers before ever visiting their websites: according to Forrester, 94% of business buyers already use AI at various stages of the purchasing process.

Venture Capital Is Shifting from Pre-Seed and Seed to Later-Stage Companies

The total volume of venture investment in crypto and blockchain in 2025 looks impressive. According to Galaxy Research, investors deployed $20 billion across 1,660 deals, more than twice the 2023 figure. However, the distribution of that capital reveals just how dramatically the market has changed.

In Q4 2025, investment volume reached $8.5 billion, but approximately $7.3 billion of that came from just 11 deals exceeding $100 million. In other words, 85% of all capital in the quarter went to a handful of large companies. The median deal size was $4 million, while the median pre-money valuation stood at $70 million. Another telling indicator: 57% of all capital for the year went to later-stage companies, the highest share in Galaxy's dataset.

The beginning of 2026 did not change the trend. In Q1, Galaxy recorded approximately $4 billion in investments across 355 deals. In dollar terms, the market contracted by 50% quarter-over-quarter, while deal count fell by 16%. At the same time, the median round size rose above $4.5 million, reaching the highest level in Galaxy's tracking history, while the share of pre-seed deals fell to 19%.

European data shows a similar effect. According to CV VC, Crypto Valley (the Swiss and Liechtenstein ecosystem) attracted $728 million across 31 deals in 2025, up 37% year-on-year. It accounted for 47% of all European blockchain project funding.

But here the distribution was extremely uneven, too. A single $400 million investment in TON accounted for approximately 55% of all Crypto Valley funding for the year and roughly a quarter of the estimated European volume. Within the region, Zug concentrated 41% of active blockchain companies, 20 of the 31 deals, and 88% of disclosed capital. Crypto Valley was already home to 1,766 blockchain companies (up 134% from 2020) while the combined valuation of the Top 50 reached $467 billion.

Even Early-Stage Startups Now Need to Show Revenue

Changes are also evident among founders who are just beginning to seek investment.

89% of applicants were still at the pre-seed or seed stage. Yet 44% were already generating revenue, and 7% reported profitability. The financing structure is changing as well.

“The early stage of a project no longer means that go-to-market can be put off until later. If 44% of companies at pre-seed and seed in this sample are already generating revenue, commercial viability becomes part of the investment story much earlier. A founder needs to demonstrate not only strong technology, but also a market, demand, and a clear path to scaling.”

— Maksym Bashmakov, CEO of Generis

For startups, this means that a strong technological idea alone is increasingly insufficient. At an early stage, founders must explain not only what the product does, but who is buying it, what problem it solves, and why this particular company will be able to build a sustainable business around the technology.

Institutional Adoption

Just a few years ago, institutional adoption in the crypto industry was often discussed as a future scenario. In Europe, it is already visible in the regulatory infrastructure.

According to Outrun Advisory, based on the public ESMA registry, as of July 31, there were 336 MiCA-authorized crypto-asset service providers in the European Economic Area.

These include not only crypto-native exchanges, brokers, custodians, and infrastructure services, but also banks, investment firms, and payment organizations.

For Web3 companies offering digital asset custody services, payment and infrastructure solutions, regulatory compliance products, tokenization, and other business solutions, the arrival of institutional players significantly raises the bar for market entry. A bank or regulated payment organization evaluates not only the functionality of a product, but also the reliability of the provider itself: team composition, track record, existing clients and partners, regulatory status, the company's public history, and independent confirmation of its expertise.

“The institutional market places much higher demands on a provider's proof of reliability and expertise. It is not enough to claim product quality. A potential partner must be able to verify the team's experience, active partnerships, performance track record, and independent confirmation of the company's reputation. For banks and other regulated organizations, this is part of the counterparty risk assessment when selecting a vendor.”

— Yana Makhnyk, Chief Growth Officer at Generis

AI Is Changing How B2B Buyers Find Vendors

The process of finding companies is changing in parallel. According to Forrester, a study of more than 17,500 business buyers found that 94% use AI in the purchasing process. 55% use it to compare products, 54% to search for information and explore solutions, and 47% to prepare internal business cases for purchases.

“AI has become the first point of contact between a company and a potential client. This means that presence in LLM responses now needs to be viewed as part of the go-to-market strategy. We see this in practice, too: Generis already had a client from the RWA segment who found us in exactly this way.”

— Alina Pivovarova, Head of PR & Communications at Generis

A Framework for Web3 Startups

For startups, the main takeaway from this data is fairly practical: in 2026, it is no longer enough to build a product first and think about how to bring it to market afterward. Work on demand generation, positioning, and reputation needs to begin significantly earlier.

• Don't delay the go-to-market strategy for crypto startups until the next round. If 44% of early-stage Web3 companies are already generating revenue, it is important for a startup to validate as early as possible who is actually willing to pay for the product. Before scaling, founders need to understand their buyer and their problem, and have at least some initial proof of real demand.
• Claim a clear niche from the outset. In a crowded market, descriptions like RWA platform, Web3 infrastructure, or blockchain-based solution say very little on their own. A startup must be able to answer three questions in one or two sentences: who the product is for, what problem it solves, and why it should be chosen over the alternative.
• Don't scale promotion until the acquisition economics are understood. A large budget will not fix weak positioning or the absence of demand. For an early-stage startup, it is far more important to first test several channels, understand where the highest-quality clients are coming from, and only then increase promotional spending.
• Start building a reputation early. Publications, case studies, partnerships, founder commentary, and mentions in independent sources cannot be created in a matter of days before negotiations with a major client or a new funding round. The earlier a startup begins accumulating proof of its expertise and results, the stronger its position when the market starts to scrutinize it.
• Monitor how LLM systems perceive the company. If buyers are already using AI to search for and compare vendors, it is important for a startup to understand whether it appears in such responses, how its product is described, and which sources the model draws on. This means working not only with the company's own website, but also with external publications, industry platforms, and clear public positioning.

And most importantly, don't treat go-to-market as a collection of disconnected marketing tasks. For a startup, it is a sequence: define the market, validate demand, formulate positioning, obtain the first proof points of product performance, become visible to the right audience, and only then scale acquisition.

So how do web3 startups go to market in 2026? What matters is proving as early as possible that the product has a specific buyer, real demand, and a foundation for further growth.