Berlin is one of Europe’s most visible startup hubs. Its combination of low cost of living (relative to other top global tech cities), deep talent pools, international founders, and a dense network of early-stage investors and operators makes it a natural laboratory for understanding what drives seed-to-Series A conversion across Europe. This article synthesizes market context, core drivers, Berlin-specific dynamics, representative cases, key metrics, and practical guidance for founders and investors aiming to increase the odds of moving from seed to a robust Series A round.
What “seed-to-Series A conversion” means and why it matters
Seed-to-Series A conversion measures the proportion of seed-funded startups that successfully raise a institutional Series A (or equivalent growth round) within a defined window (commonly 18–36 months). It is a critical indicator of ecosystem health because the Series A is often the inflection point where teams scale product, go-to-market, and hiring to become category leaders. Healthy conversion rates signal efficient capital allocation, strong talent mobility, and investor confidence in follow-on financing.
European market context: macro trends shaping conversion
– Venture flow: European venture investment surged through 2020–2021 and then cooled in 2022–2023. Capital availability remains uneven across stages; seed funding was relatively resilient while mid-stage growth capital tightened, compressing Series A supply in some verticals. – Investor behavior: More institutional capital has shifted toward later-stage deals in boom cycles, but constrained exit markets and rates normalization have made Series A diligence more rigorous. – Cross-border funding: European Series A rounds often include international syndicates (UK, Nordic, US), so founders must demonstrate viability beyond national borders. – Sector variance: SaaS and B2B often show higher conversion probabilities than crowded consumer verticals or capital-intensive deep tech unless the latter reaches clear technological inflection points or strong strategic partners.
Reports from Dealroom, Atomico, and VC databases indicate that in Europe conversion rates vary widely by vintage year and sector, yet a reasonable benchmark is that a notable share of seed-stage startups progress to Series A within two years, with stronger outcomes for those showing robust unit economics and repeatable, scalable growth.
Key factors influencing the transition from seed to Series A funding
- Revenue traction and unit economics: Strong headline growth metrics (MRR/ARR for SaaS, GMV or recurring orders for marketplaces) along with robust unit economics—LTV/CAC, CAC payback, and gross margins—serve as key benchmarks for Series A investors.
- Product-market fit and retention: Demonstrable retention strength (cohort analyses, net revenue retention) paired with minimal churn lowers perceived risk and validates increased investment in customer acquisition.
- Team and founder track record: Founders or teams with prior exits, substantial sector expertise, or complementary capabilities significantly boost investor trust in large‑scale execution.
- Talent access and hiring velocity: The capacity to secure seasoned engineers, product leaders, and commercial talent in tech hubs such as Berlin accelerates execution and influences valuation trajectories.
- Capital supply and syndicate quality: Seed investors willing to support follow‑on rounds, combined with access to established Series A venture firms, markedly raise the likelihood of securing a successful round.
- Strategic partnerships and customer concentration: Early agreements with reputable enterprise clients or channel partners help validate revenue paths and appeal to later‑stage investors.
- Market size and defensibility: Expansive addressable markets and durable competitive advantages—network effects, exclusive data, or regulated positions—strengthen the case for Series A expansion.
- Timing and macro environment: Interest rate trends, exit climate, and overall risk tolerance shape both the pace and magnitude of Series A investment across regions.
Why Berlin matters: unique ecosystem levers
- Concentration of early-stage investors: Berlin brings together notable seed and pre-seed funds (for example, Point Nine, Cherry Ventures, Project A) along with active angel groups that often deliver swift first checks and hands-on guidance.
- Operator density and talent pool: Major tech companies, unicorns, and seasoned operators continually generate repeat founders and experienced senior talent for scaling ventures.
- Cost arbitrage across Europe: Its comparatively lower expenses (relative to London or San Francisco at equivalent stages) give teams extended runway to refine products before facing typical Series A pressures.
- Strong international orientation: Multilingual teams equip startups to expand across EU markets quickly, reinforcing a central Series A narrative prized by many VCs aiming for continental reach.
- Public-private support: Initiatives such as EXIST, government grants, and city-supported programs (startup hubs, corporate collaboration schemes) can offer non-dilutive funding and early pilot opportunities, proving especially valuable for deep tech and climate-focused companies.
Representative Berlin cases and lessons
- Zalando and Delivery Hero (historical lens): These early Berlin standouts demonstrate how scaling B2C platform logistics can generate powerful multiplier effects and cement category leadership, while their post-seed growth drew substantial later-stage capital and talent that fueled subsequent founder generations.
- SoundCloud: This company proved that a platform with strong community momentum can expand worldwide from Berlin, yet it also underscored how sensitive investor confidence can be to monetization timing and the need for persuasive revenue plans.
- Tier and Gorillas: Rapidly expanding consumer logistics players secured significant follow-on funding after asserting dominance in their local markets, while also revealing the capital-heavy nature of the model and the critical focus on unit economics at the Series A stage.
- Trade Republic and N26: These fintech leaders illustrate that solid regulatory execution, efficient user acquisition, and unmistakable product–market fit can attract major Series A rounds and beyond, frequently involving international investor groups.
- Point Nine-backed SaaS startups: Numerous enterprise SaaS ventures in Berlin reached Series A by achieving ARR benchmarks and proving strong gross margins and NRR, following conversion frameworks that consistently benefit enterprise-driven founders.
Quantitative signposts investors look for (by sector)
- SaaS/B2B: Rapid ARR growth, strong unit economics, expansion revenue (net revenue retention >100%), a clear sales model (land-and-expand or enterprise deals), and predictable churn.
- Marketplace and consumer: Demonstrated repeat purchase behavior, improving CAC payback, retention cohorts trending positively, and evidence of defensible supply-side dynamics.
- Deep tech and climate: Technical milestones de-risking commercialization, strategic partnerships or pilots, clear path to repeatable revenue, and access to grant/EIC-style funding to extend runway.
Actionable guide for founders aiming to boost their chances of converting
- Prioritize unit economics early: Monitor CAC, LTV, payback periods, gross margins, and burn multiples, ensuring that even at the seed stage every dollar invested can be linked to reliable revenue generation.
- Structure seed investors for follow-on: Choose seed leads capable of syndicating into a Series A or connecting you with strong Series A contenders, while steering clear of isolated angels who cannot support the next raise.
- Demonstrate repeatability: Consistent GTM channels, dependable sales rhythms, and early team members who can scale operations all provide compelling proof for Series A VCs.
- Focus on retention and cohorts: Cohort-driven insights reveal growth more accurately than superficial KPIs, helping illustrate enhanced unit economics across cohorts.
- Build a measurable timeline: Establish clear milestones for the next 12–24 months that make pursuing a Series A feel like a natural progression, whether tied to revenue, customer traction, hiring, or technology benchmarks.
- Prepare for tougher diligence: Expect Series A investors to scrutinize contracts, unit economics, founder equity structures, and customer references, so organize the necessary documentation well in advance.
VC perspective: how investors evaluate conversion probability
Investors synthesize qualitative and quantitative signals: founder capability and conviction, customer references, reproducibility of growth channels, defensibility, runway, and the landscape of competitors. In practice, Series A partners will frequently ask whether a company can triple or quintuple key revenue metrics within 12–24 months post-investment, and whether the current leadership team can build to that scale. Syndicate composition and signal investors (reputation of seed lead) materially affect dealflow momentum.
Caveats tailored to each sector and development stage
- SaaS: Faster path to Series A if ARR thresholds and retention metrics are visible, but ARR expectations differ by market—enterprise SaaS can move slower but with larger deals.
- Consumer: Requires clear differentiation and sustainable LTV/CAC; capital intensity and churn risk slow some consumer startups’ progression to Series A.
- Deep tech: Scientific or hardware milestones are sometimes necessary before commercial traction; public grants and strategic investors often bridge the gap to Series A.
Policy, ecosystem interventions, and public capital
Berlin gains support from public and semi-public initiatives that bolster seed-stage startups through grants, municipal programs, and corporate collaborations. Access to non-dilutive capital and official endorsement helps limit early-stage dilution and, when combined with market traction, can enhance the appeal of a potential Series A. Aligning public funding tools with private follow-on investment remains a key mechanism for strengthening conversion outcomes.
Practical metrics founders should share with Series A investors
- ARR/MRR growth and month-on-month or quarter-on-quarter growth rates
- Gross margin and contribution margin by product line
- Customer cohorts, churn, and net revenue retention
- CAC, LTV, and CAC payback period
- Burn multiple and runway to constructive milestones
- Top customer logos, pilot agreements, and referenceable contracts
- Hiring plan with key hires and costs tied to projected growth
Results and compromises: determining the ideal moment to pursue a Series A
Seeking Series A funding prematurely can undermine growth or set expectations the team may fail to satisfy, while waiting too long can erode momentum or weaken a competitive position; the ideal moment strikes a balance between proven repeatability, solid unit economics, and a convincing strategy for deploying capital to drive scalable expansion, and although Berlin’s ecosystem offers some leeway through its abundant talent and varied early-stage investors, founders must still synchronize their fundraising with tangible operational milestones.
Seed-to-Series A conversion in European markets is governed by a mix of macro capital cycles and concrete, company-specific signals: repeatable revenue, sound unit economics, a hire-ready team, and investor syndicates willing to follow. Berlin crystallizes these dynamics because it combines a deep talent supply, a dense early-stage investor base, and supportive public infrastructure. Founders who translate product-market fit into measurable growth and defensible economics, while aligning investors and timing strategically, are most likely to convert seed momentum into a transformative Series A, and the lessons from Berlin scale across Europe when applied with sector sensitivity and rigor.
