Introduction
Series B is a critical growth phase for startups when they transition from fast-growing companies to industry leaders. The focus shifts from growth hacking to building long-term operational efficiency and market dominance.
Interested in detail? Here is a short break-down of Series B funding.
In this article:
- Expansion & Market Domination | Series B Funding Go to text
- Who Invests During Series B Round? | Startup Basics Go to text
- What is the Purpose of Series B Funding? | Startup Basics Go to text
- Is It Hard to Get Series B Funding? | Startup Basics Go to text
- How to Secure Series B Funding? | Startup Basics Go to text
- What Happens After Series B? (Series C & Beyond) Go to text
Expansion & Market Domination | Series B Funding
After a startup successfully raises Series A, it enters Series B funding, which focuses on market leadership.
At this stage, the startup has a proven business model, steady revenue, and a clear path to profitability.
This Series B funding is for businesses that focus on:
- scaling operations,
- expanding into new markets,
- establishing a dominant position in the industry.
Who Invests During Series B Round? | Startup Basics
Late-stage venture capital firms are the primary investors during the series B round.
Private equity (PE) firms also participate, looking for promising startups with strong revenue growth and scalability.
Additionally, corporate investors and strategic partners invest in Series B rounds, especially when a startup’s success aligns with their industry interests. Many startups also receive follow-on funding from existing investors, as Series A backers double down on their initial investment to support further growth.
Some of the top VC firms actively funding Series B startups include:
- Sequoia Capital, Andreessen Horowitz (a16z),
- Benchmark Capital,
- Tiger Global,
- General Catalyst, etc.
📌 Example: In 2011, Dropbox raised $250M in Series B funding from Index Ventures, fueling mass user adoption.
What is the Purpose of Series B Funding? | Startup Basics
- Geographic & market expansion – Enter new cities, countries, or customer segments
- Scaling operations & infrastructure – Invest in logistics, warehouses, and technology upgrades
- Aggressive marketing & branding – Strengthen market position through ads & partnerships
- Expanding team & leadership – Hire executives, sales, and product specialists
- Acquisitions & partnerships – Buy smaller startups or form strategic alliances
Is It Hard to Get Series B Funding? | Startup Basics
One of the biggest challenges is demonstrating steady growth.
Investors want to see consistent revenue increases to feel confident about the startup's future.
Startups also have to deal with a lot of competition.
Other well-funded companies are often scaling up quickly, which can make the landscape quite challenging. Plus, there are important expectations around valuations.
At this stage, investors generally hope to see startups valued between $100 million and $500 million or more.
On top of all that, if you are thinking about expanding globally, you’ll most probably face more complexities. You'll need to navigate various legal, financial, and logistical challenges that come with growing into new markets.
Interested in a bird's eye point of view?
Click here to see our roadmap article: Startup Funding Rounds >
How to Secure Series B Funding? | Startup Basics
- Show strong financial metrics – Growing revenue, high retention rates, and positive unit economics.
- Expand market footprint – Investors want startups scaling beyond early customers.
- Strengthen leadership team – Hiring experienced executives improves investor confidence.
- Optimize operations – Demonstrate efficiency in scaling without burning cash.
- Leverage series A investors – Existing investors can introduce new Series B investors.
📌 Example: Airbnb raised $112M in Series B from Andreessen Horowitz and Sequoia to expand internationally.
What Happens After Series B? (Series C & Beyond)
| 📉 If fails: | 🚀 If successful: |
| The startup may struggle to raise Series C, pivot, or seek alternative financing (debt, partnerships, M&A). | The startup raises Series C ($50M – $500M+) to prepare for IPO or acquisitions. |
Click here to read our article on Series C Funding Round >
