Seed, Series A, Series B: startup funding rounds explained
Startups raise money in stages. Pre-seed and seed build the product, Series A grows it, and Series B and beyond scale it. What each round means.
News about startups often mentions a "Series A" or a "seed round". Here is what they mean.
The usual stages
- Pre-seed: very early money, often from founders, friends, family or angels, to test an idea
- Seed: money to build the product and find the first customers
- Series A: money to grow once the product works and customers are paying
- Series B: money to expand to new cities, markets or products
- Series C and later: money to grow much bigger, prepare to buy other companies or list on a stock exchange
Valuation
Each round sets a price for the company, called its valuation. If it goes up between rounds, earlier investors' shares are worth more.
Example
In 2021, Pakistani quick-commerce startup Airlift raised $85 million in a Series B round.
Related
- What is venture capital?
- What is a unicorn startup?