Series B Funding: A 10-Year Look at Startup Growth and Investment Trends
Series B offers both risk and strong growth potential. Here’s how funding at this stage has evolved over the past decade.
When it comes to startup funding, Series B rounds reveal a lot about the health of the venture capital market. These rounds sit at a key stage: companies are no longer early bets but still face real risk. At this point, startups have shown traction, but success isn’t guaranteed.
Series B carries a mix of high risk and high reward. Investors are more selective, and the number of deals reflects that. In the past 10 years, the U.S. has typically seen between 600 and 900 Series B deals each year—much fewer than seed rounds, which often exceed 8,000 annually.
Consistent Deal Flow, Except for 2021 Surge
Over the past decade, the number of Series B rounds has stayed relatively stable. The only major spike happened during the 2021-2022 boom. Outside of that period, deal volume has remained within a steady range.
Investment Amounts: Highs, Lows, and Market Shifts
While deal counts have stayed consistent, the total dollars invested in Series B rounds have varied more. In 2021, Series B funding hit a record $347 billion. In the following year, total investment dropped to just over half that amount.
Still, the share of total venture dollars going to Series B has remained steady. In most years, about 1 in every 6 or 7 dollars raised goes to this stage. This year’s ratio may seem lower, but that’s mainly due to massive late-stage deals like the $40 billion raised for OpenAI.
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Sector Trends: AI Dominates, But Not Alone
Investor interest shifts over time. Recently, AI startups have attracted the biggest Series B rounds. Together AI led the way this year with $305 million raised for its generative AI cloud platform.
However, not all large Series B rounds are going to AI. Other major deals include $200 million for Base Power, which develops residential backup power systems, and $186 million for Electra, a clean iron producer for steelmaking.
On the other hand, big Series B rounds for consumer apps have become rare. A decade ago, these deals were more common, fueled by the rise of companies like Uber and Airbnb. That’s no longer the case in today’s market.
Fewer Mega Rounds
The number of Series B rounds of $100 million or more peaked in 2021 and has declined since. Large rounds still happen, but they’re less frequent as investors have become more cautious.
The Odds Remain Tough
While Series B funding signals progress, most startups never reach this stage. Even among those that close a Series A, only about half move on to Series B. Securing a round at this level shows strong promise, but it’s no guarantee of long-term success.
History shows that even among startups reaching Series B, only a small number will go on to deliver massive returns. This stage continues to separate solid contenders from the rest, offering investors both opportunity and risk.