2024 Web3 Growth Status: The industry is on the brink of transformation, with over 100 startups raising more than $1 billion

Original Title: 《The State of Web3 Growth 2024》

Author: SAFARY

Compiled by: ShenChao TechFlow

Web3 Growth Landscape: Interactive Map and Database

Insights Summary

• 101 Web3 growth and social startups have raised over $1 billion.

• Since last year, 23 startups have secured $277 million in new funding.

• There are few new Series A rounds; venture capital firms are increasing investments in successful projects.

• Attribution/analytics, loyalty, and social startups received the most new funding, accounting for 80% of all funds raised across 10 categories.

• Messaging is the second category with the most funding, securing $245 million, following social and publishers ($400 million), but this category only received $7 million in new funding.

• Ad networks and community tools are the most crowded categories, with 19 teams, followed by messaging and loyalty, each with 18 teams.

• The loyalty category has significantly shrunk from over 40 teams in 2023 to 18 surviving teams today.

• The breakout category of 2023, "Referrals and Recommendations," has decreased from 17 teams to 9, with 2 of the most funded teams having shut down.

¹ Note: Not all of this funding is public—more than 10 teams privately shared their funding details with us for inclusion in this report.

Introduction

• You may be correct in your judgment of the direction for the next decade, but if you are a few years early, you may not succeed. This is the story of these two years.

The Web3 growth ecosystem seems inevitable—Web3 companies need to deeply understand users, engage, and attract new users. Today, over 160 companies are building the future of this emerging digital media industry, with 101 startups raising nearly $1 billion in funding.

This report delves into this rapidly evolving industry, providing a comprehensive overview of the most promising Web3 growth companies. It includes both publicly announced and privately shared funding data, offering a detailed snapshot of the industry today.

In many ways, the Web3 growth industry parallels the rise and fall of digital marketing in the 2010s. The MarTech space expanded dramatically, from 150 companies in 2011 to over 14,000 by 2024.

Chief MarTech's 2024 Marketing Technology Landscape (Source)

However, with the onset of the 2020s, privacy regulations like GDPR and CCPA disrupted this carefully constructed ecosystem. It is during this time that Web3 emerged, focusing more on community and privacy in the marketing environment. Consumers began interacting on "dark social" channels like Discord, Telegram, and Reddit, known for their difficulty in tracking. Suddenly, marketers could no longer rely on traditional targeting methods, prompting new companies to rise, aiming to rebuild our digital media landscape.

The first two years of this new digital media industry have been challenging. Most companies are struggling, with over half failing to survive. We will explore why certain categories have failed to gain traction and our expectations for the 2024-2025 cycle.

This report is based on last year's analysis, highlighting the ongoing evolution of the Web3 growth ecosystem and the innovative companies driving it.

About Safary

Safary is home to the leaders in Web3 growth. Our platform enables the best teams to unlock deep user insights and build more direct relationships with users; our community provides the knowledge and network needed for success.

We proudly help promote the Web3 growth ecosystem by connecting the best growth leaders in the crypto space and sharing their insights with the broader industry.

Category Insights

This market map includes over 160 teams building Web3 growth and social platforms, from tasks to analytics, attribution, customer relationship management, loyalty, publishers, and more.

Ad Networks

Note: Each category is divided into: Definition → Challenges → Opportunities

Ad networks connect publishers and advertisers, simplifying the ad buying process. They aggregate ad space from multiple publishers, providing advertisers with a single platform for ad placement.

Currently, there are 19 ad networks, 9 of which have raised a total of $51 million:

While Web3 ad networks have significant potential, they face severe challenges in navigating competition and acquiring quality publishers:

1. Competition for Publishers and Advertisers

Although we are still in the early stages, competition will be fierce. New players like Relayer and Spindl are entering the market, competing with category leaders like Coinzilla and Hypelab.

New networks must address the classic market dilemma—creating demand (providing low-cost conversions for advertisers) and acquiring supply (paying publishers more for ad inventory).

To compete, they may offer guarantees to publishers and attract advertisers through a cost-per-action (CPA) model, paying only when users complete the desired conversion event.

Advertisers prefer the CPA model because it guarantees results, but publishers are dissatisfied with this, as they prefer to be paid for the traffic they generate rather than based on users moving through the funnel. This forces new ad networks to bear all the risk, and the longer it takes to build the market, the faster their capital will be depleted.

Despite this difficult predicament facing new ad networks, increased competition is good news for early publishers and advertisers leveraging this channel!

2. Unlocking Quality Publishers

In Web2, publishers relied on advertising as their primary revenue source, making the value exchange straightforward—revenue for attention. However, leading Web3 publishers (e.g., wallets, Opensea, Uniswap) have alternative revenue models and often hold a negative view of advertising. Category winners need to offer them an attractive value proposition to change this mindset.

These challenges present a unique opportunity—making the CPA model effective for publishers, which is unique in Web3, even if it is still in the theoretical stage.

Imagine your favorite crypto media site, like Blockworks or Messari, sharing news and research about trading data. If they require wallet login, they could embed a widget similar to Frame, allowing you to purchase the token you are reading about without leaving the article.

This setup could incentivize publishers to share the risk, as conversions happen on their site. It also benefits advertisers, especially in the DeFi space, as they may generate revenue without needing users to visit their site.

In this arrangement, publishers provide ad space, ad networks offer embedded ad units, and decentralized exchanges (DEXs) provide trading, with all three sharing revenue from the generated trading volume.

This approach can be extended to any wallet-aware channel beyond media sites, such as Discord, Telegram, or other decentralized applications (dapps) with large user bases!

Publishers and Social

Note: Each category is divided into: Definition → Challenges → Opportunities

Publishers and social platforms aggregate information from Web3 creators and specific domains.

This category includes 32 platforms: 20 social platforms (11 of which have raised $375 million) and 12 publishers (8 of which have raised $25 million), with total funding reaching $400 million, of which $180 million is new funding:

Web3 social faces user retention issues

New social applications face the challenge of convincing users that they can sustain themselves, making efforts to establish a presence worthwhile. While tokens help attract crypto natives and facilitate network launches, long-term retention depends on these platforms providing real value beyond mere speculation.

These platforms have the potential to become the largest crypto publishers (see the section on aligned incentives in ad networks)

If they can create new, differentiated ways of online interaction, they may become the main hubs for on-chain communities. This would mark a shift away from platforms like Twitter, where on-chain natives interact through games, streaming platforms, and social applications. Wherever users gather, there are growth opportunities—not only for crypto-native applications but also for the expansion of the entire ecosystem.

Attribution and Analytics

Note: Each category is divided into: Definition → Challenges → Opportunities

Attribution and analytics aggregate on-chain, in-app, and social data to provide detailed insights into user profiles and consumer behavior.

Currently, there are 14 attribution and analytics companies, with total funding of $70 million, including $25 million in new funding:

Despite the potential of on-chain analytics and attribution platforms, they face challenges in fully realizing their potential:

1. Pure on-chain analytics, while interesting, are not viable enough for growth leaders

In Wave 1 (2022-2023), the demand for generalized Web3 growth analytics was largely negated, as evidenced by the transformations of many companies. Helika pivoted to attribution and focused on gaming, Persona became an ad network, Convrt shifted to B2B customer relationship management, Raleon exited Web3 to focus on AI, while other companies struggled to gain market share.

2. Multi-channel acquisition and performance marketing are still not mature enough

For attribution to be effective in crypto marketing, companies need to execute multi-channel strategies simultaneously (e.g., Twitter, blogs, ads, referrals, and tasks). However, most companies do not operate this way. Instead, they jump from one channel to another—doing tasks one month, referral programs the next, then ad campaigns—these efforts rarely overlap. This makes horizontal comparisons difficult and limits the effectiveness of attribution.

• The Web3 growth capabilities we have long envisioned are finally here

Teams can now build rich user profiles by combining first-party data with on-chain identities, social graphs, and wallet analytics. The best teams are establishing direct relationships with users. No longer is it about tracking in vain, hoping users will return. Creating a unified customer data layer to gain a comprehensive 360° view of on-chain users is becoming the norm.

Affiliates and Referrals

Note: Each category is divided into: Definition → Challenges → Opportunities

Affiliate and referral platforms simplify the discovery, tracking, and rewarding of B2B partners and B2C advocates. While new Web3 products often use waitlists to drive referrals, "referrals" typically refer to active users who actively recommend friends.

Currently, there are 9 affiliate and referral companies, with 5 raising approximately $7 million—about half of last year's funding:

Once the fastest-growing category in 2023, affiliates and referrals have now seen significant consolidation. The two most well-funded companies, Chainvine and Qwestive, ceased operations in 2023 and returned funds. We believe Web3 referral platforms face several key challenges:

1. Referrals require an established and growing user base to be effective

Referrals can bring in the highest quality users for products, but they rely on having an initial user base to drive further growth.

For example, suppose there is an existing user base of 500 real users (which is common for many DApps):

• Typically, 2% to 30% of users may refer friends. At a 15% referral rate, about 75 of these 500 users may make referrals.

• If each referrer brings in 3 friends, and 30% convert, that would generate 68 new users.

1. Web3 referrals are not a "set it and forget it" channel

While gaining 68 new users (+13%) from an initial referral program may have an impact, challenges arise in maintaining momentum.

If you gain 100 new users each month, referrals may only add 13 users, making it difficult to justify even moderate platform spending. To keep the program appealing, you need to continuously innovate, which from the platform's perspective means frequently adjusting customer plans—this limits scalability.

3. Rewards are often not substantial enough for Web3 users

The promise of Web3 referrals is that referrers can earn more by sharing revenue with the protocol. For example, referrers might earn 25% of the transaction fees of the referred user or a fee based on trading volume.

In practice, most referral rewards are disappointing, often lower than their Web2 counterparts. For instance, Hashflow (a decentralized exchange) launched a referral program offering 1 ARB ($0.80) for every $1,000 traded by the referred user. If a friend trades $10,000 on Hashflow, you would only earn $8. It's no wonder that spreaders still mention GMX's successful referral program in April 2022.

This is not to say that Web3 referral platforms cannot succeed, but they face significant challenges at the current scale of crypto. DApps need to gain thousands of new users each month to generate enough trading volume to justify the investment in referrals as a growth channel.

As with any incentive program, success depends on targeting the right user group and providing sufficiently meaningful rewards to drive action. Rather than using referral programs as a broad user acquisition strategy with small rewards, focus on high-quality users of the protocol and offer more substantial incentives. These users are more likely to bring in similarly valuable users, thereby enhancing the overall quality and impact of the program.

Tasks

Note: Each category is divided into: Definition → Challenges → Opportunities

Task platforms serve as marketplaces for participation, connecting Web3 user networks with incentives provided by companies to complete specific actions.

Currently, there are 12 task platforms (down from 18 in 2023), with 9 raising a total of $103 million, including $15 million in new funding driven by Layer3's Series A:

Tasks once effectively boosted metrics through airdrops and social follows, but as the market matures, these strategies are falling out of favor.

These strategies are well-suited for driving short-term engagement and quickly attracting users. However, the industry is now more focused on genuine user engagement and building lasting communities. This shift reflects an increasing emphasis on long-term value and authentic participation, leading task platforms to rebrand and evolve.

Historically, task platforms have been closely tied to the points metaverse, where users primarily accumulate points by completing tasks, often with the ultimate goal of receiving airdrops. As the effectiveness of airdrop farming wanes, reliance on points alone is no longer sufficient to maintain user interest or platform growth. The current challenge is to move beyond this superficial engagement and provide something truly valuable—encouraging users to return because they genuinely feel valued, not just for points or the promise of potential airdrops.

Task platforms will evolve into incentive experimentation platforms

Old things are coming back—tasks are shifting from simple "click and claim" tasks to ongoing dynamic engagement, connecting traditional loyalty programs with on-chain actions. Successful platforms will be those that continuously innovate on "do X, get Y" incentive mechanisms. They need to design new formats, build the functionalities required to support these formats, promote them to teams, and immediately start the next project. Essentially, they will become experimental platforms—Web3 is too dynamic to settle for less.

Loyalty

Loyalty programs enhance customer satisfaction through rewards such as discounts, access, and experiences, while driving repeat purchases and long-term retention.

Currently, there are 18 loyalty platforms (down from over 40 in 2023). Among them, 12 have raised a total of $88 million, with new funding of $30 million, primarily due to Blackbird's $24 million Series A:

Web2 brands largely abandoned crypto in 2023, taking growth with them

Many loyalty platforms have either shut down or pivoted to non-crypto businesses, which is not surprising, as this category primarily focused on Web2. These companies found it easier to adjust their products without changing their target customers. Interestingly, this shift mostly occurred in the past 6 to 9 months, rather than at the onset of the bear market.

Notable exits include Co:Create (which raised $25 million) and Hang (which raised $16 million). These transformations make sense—rather than chasing Web2 brands to create innovative experiences, many companies chose to leverage their technology to build consumer experiences, with the potential to pivot to B2B infrastructure in the future.

With the increase in data privacy regulations and the rise of omnichannel consumer experiences (online, offline, and on-chain), the demand for a unified data layer is growing, becoming unique with the support of blockchain technology.

Clearly, everything will become transactional, though not necessarily monetary transactions. As on-chain data is generated, brands will securely access increasingly rich user profiles. These profiles will combine on-chain social behavior and transactions with first-party online and offline data, creating the ultimate data treasure trove for large brands. This data will enable brands to create highly targeted audiences, driving repeat purchases and long-term loyalty.

Community Tools

Community platforms provide tools for managing communities, tracking engagement, and providing analytics to enhance collaboration, member retention, content creation, and growth.

Currently, there are 19 community tool companies, with 10 raising a total of $87 million:

Communities lacking a business model face challenges and difficulties in tracking revenue impact

Community tool companies face significant obstacles, primarily two issues. First, many communities lack sustainable business models, making it difficult to invest in specialized tools. Second, it is challenging to measure how communities directly contribute to revenue. While communities can enhance brand loyalty and advocacy, translating these benefits into clear financial outcomes remains complex. These challenges make it difficult for community tool companies to prove their value and grow in the market.

Redefining community: from long-term full-funnel engagement to deep short-term group experiences

Web3 community tool companies have the opportunity to redefine the meaning of community. Rather than focusing on traditional large-scale communities, they can leverage blockchain technology to create dynamic on-chain group chats and short-term experiences with integrated financial transactions. This approach allows for meaningful and measurable outcomes without requiring a complete funnel. By prioritizing value-driven, interactive, and financially intertwined communities, Web3 tool companies can explore new engagement and growth models, paving the way for transformative changes in the digital realm.

Messaging

Web3 messaging platforms are protocol-level communication networks that support cross-chain messaging and notifications between dapps, wallets, services, and on-chain communities.

Currently, there are 15 messaging platforms (down from 24 in 2023), with 11 raising a total of $240 million, but only $7.5 million in new funding from Sending Labs' expansion in February:

Messaging to wallets is ineffective unless messages can reach users where they frequently go

Web3 messaging platforms face a dilemma because if users do not see messages, sending them to wallets is meaningless. Unlike traditional messaging applications that centralize communication in user-friendly interfaces, many Web3 messaging protocols lack a reliable destination where users can continuously check messages. This gap means that even if messages are sent, they are often ignored, undermining the effectiveness of communication. To succeed, Web3 messaging platforms need to create or integrate with ecosystems where users actively engage, ensuring messages can be seen and acted upon.

Web3 social applications may become the messaging layer for wallets

Existing messaging platforms may struggle to succeed. Instead, Web3 social applications that integrate messaging layers, such as Farcaster, Lens, and DeBank, may lead the way. These platforms allow messages to be sent to wallets where on-chain users actually spend their time, making communication more effective and relevant.

Customer Relationship Management and Go-to-Market Strategies

Web3 Customer Relationship Management (CRM) systems help teams manage and analyze customer interactions, primarily using on-chain data to create personalized marketing campaigns.

Currently, there are 6 CRMs (down from 20 in 2023), with total funding of $24 million:

Relying solely on on-chain data is insufficient for B2C CRMs to thrive

All Web3 CRMs were initially aimed at B2C companies (except for 3RM), designed to help them understand their on-chain holders and community members. However, it is clear that the demand for this target data is greater in the B2B space.

The crypto ecosystem is primarily composed of B2B companies, providing a larger and underserved market for Web3 CRMs.

B2B companies urgently need to leverage on-chain data to qualify target companies while also utilizing non-traditional channels (such as Twitter and Telegram) from a Web2 perspective to reach these companies. This shift presents significant opportunities for Web3 CRMs to serve this historically overlooked market.

Marketing Agencies

Web3 growth agencies provide strategic advice and deploy growth strategies for blockchain projects.

Currently, there are 15 marketing agencies (down from 32 in 2023), all of which are self-funded:

Selling marketing services to tech teams that do not believe in marketing is challenging

The agency market has become increasingly active, with many new entrants emerging. A wave of small agencies has entered the market, with many experienced growth leaders transitioning to consulting roles after layoffs. However, many of these consultants struggle to sustain their businesses after six months. If in-house marketers find it difficult to keep their positions, it is even harder for independent consultants to make a compelling case externally.

Nevertheless, the demand for growth support from early-stage teams is evident, especially for those needing non-technical expertise to gain a competitive edge in a saturated market. While the large budgets of mature projects from the last cycle have decreased, emerging teams are seeking support to differentiate themselves.

The current market favors larger marketing agencies that can provide comprehensive services—including design, growth, and development—rather than individual operators. This integrated approach is more appealing to clients seeking robust marketing solutions.

As large agencies dominate the competition for marketing talent, ongoing consolidation will intensify

Looking ahead, the marketing agency market may further consolidate, with large agencies dominating the competition for top talent. These resource-rich agencies can offer multidisciplinary services, while small specialized agencies and individual consultants often struggle to compete. However, the best operators with unique expertise in niche areas like token economics, brand strategy, and founder storytelling may succeed by differentiating themselves and addressing market challenges.

What’s Next?

So, what can we expect to happen in the next two-year cycle?

First, we anticipate significant innovations in incentive programs, including referrals, tasks, and loyalty systems. Companies will experiment with new formats and mechanisms aimed at creating more engaging and rewarding user experiences.

Second, integrating social elements into messaging platforms will become crucial. Web3 social applications may evolve into the primary messaging layer, forcing traditional Web3 messaging platforms to integrate social features to remain relevant.

Finally, we look forward to a wave of bold and unconventional ideas that will push the boundaries of what Web3 can achieve. While some concepts may seem distant today, they could define the next phase of this rapidly evolving industry.

The Web3 growth space is on the brink of transformation, driven by innovation and a willingness to explore the unknown. Those who can adapt and lead in these areas will shape the future of digital interaction and media.