Series B

Series B is the growth round for a company that has already demonstrated product-market fit and is now building out sales, team and new regions or products. It does not follow automatically from Series A: several years often pass between the two rounds, because investors want hard numbers on growth, gross margin, retention and capital efficiency. What is examined at this stage is no longer intent but cohort analyses over several years, net revenue retention, payback on customer acquisition costs, and whether additional capital can genuinely be converted into additional growth.

Round sizes are markedly larger than at Series A while dilution is proportionally lower. Alongside classic venture funds, growth investors and strategic investors often join at this stage, the latter bringing market access as well as capital but also raising questions about independence and future exit options. Organisationally the phase means building a second management tier, robust reporting and professional processes. It matters for M&A because this is where a company's own acquisitions and first conversations about an eventual exit become realistic.

The focus shifts from whether the business model works to how fast it can be scaled, which brings sales efficiency metrics, gross margin and cohort development to the fore. International funds frequently enter for the first time at this stage, which raises the requirements for reporting, accounting and governance. At the same time the number of share classes grows, making the capitalisation table and therefore later negotiations more complex.