Series B

By the Series B stage, a company typically has a solid customer base, significant revenue and a business model that has shown it can work. The focus shifts from proving the concept to growing rapidly.

Series B funding is commonly used to expand into new markets, hire more staff in sales, marketing and engineering, develop additional products, and sometimes acquire smaller companies.

Series B rounds are usually larger than Series A rounds and are often led by venture capital firms that specialise in later-stage companies, with earlier investors often investing again to maintain their ownership.

For example, a delivery start-up that has succeeded in several cities might raise a Series B round to expand across the country, hire hundreds of staff and improve its technology.

Each new round dilutes existing shareholders, but if the company's valuation rises between rounds, their stakes become more valuable even as their percentage ownership falls. Later rounds, such as Series C and beyond, may follow, often with larger amounts and investors such as growth equity firms, hedge funds and corporate investors, as the company prepares for a sale or a stock market listing.