You may not be familiar with Hexathe Paris-based startup studio that has launched dozens of B2B software companies, but some of its portfolio companies have become known unicorns, such as Front, Airline call and Spendesk.
And it turns out that Hexa itself could be considered a startup as the company has just raised a funding round of $22 million in new capital (€20 million). This is not the first time that Hexa has raised capital externally. But it’s the company’s first round since 2016.
“We have some family offices that invest, but we mainly have local entrepreneurs that invest like Luc Pallavidino (Yousign), Adrien Van Den Branden (Canyon), Paul Vidal (Collective) and Arnaud Schwartz (Marble),” he told me the founder Thibaud Elzière.
In other words, Hexa grows from its own community of founders and friends. And this is just a first step as the company promises more funding will follow in the coming months.
“This marks our initial closure and we anticipate a further round in the new year. We aim to welcome even more family offices and entrepreneurs to join this journey,” Hexa co-founder Quentin Nickmans wrote in the funding announcement.
Hexa began life as eFounders, a startup studio focused on B2B software-as-a-service startups. As it expanded its scope, it recently rebranded as Hexa so that each industry (fintech, web3 and SaaS) is handled by its own small startup studio.
The startup studio also formalizes its fundraising process with this funding round. When Hexa decides to create a startup, they try to find the right founding team to iterate on that idea and turn it into their own project. Initially, Hexa and its startup studios help with the basic building blocks, including product design, go-to-market strategy, recruitment and more.
After a year or so, when a startup is ready to raise some money to take it to the next level, Hexa leverages its community of investor friends with something called eClub.
For each startup, eFounders would create a special purpose vehicle (SPV), which is an ad-hoc investment vehicle created for a specific investment. Investors from Hexa’s eClub would invest in this SPV, which would then invest in the startup. Hexa itself retains 30% equity after seeding.
eClub is not going away. Instead, it will be limited to Hexa investors.
“Until now, we were working with eClub — we pro-rated our rights to a group of investors in the form of an SPV. We will continue to do the same, but it will be for the studio shareholders — which is also one of the reasons why people invested,” Elzière said.
Image Credits: Hexa
30 new startups per year
Arguably, it has never been easier to build a software startup thanks to no-code tools, a wide range of SaaS services, cloud hosting and a simplified regulatory framework. So Hexa plans to capitalize on this by increasing its batch size and overall pace.
Hexa expects to be able to launch 30 new startups annually. Of course, it won’t happen overnight. The startup studio is already considering hiring new team members to launch new branches. When talking to the Hexa team over the past few months, they mentioned some of those potential verticals — climate, education and health.
But it represents a huge increase compared to Hexa’s current rate of startup creation. In the last 12 years, Hexa has spawned 40 companies — that’s about 3 to 4 companies per year.
This vision will also depend on the macroeconomic environment for the startup ecosystem. The Hexa portfolio companies—like the rest of the tech ecosystem in Europe and the US—are going through a rough patch.
While these portfolio companies generate a combined $277 million in annual recurring revenue (an impressive feat!), the total portfolio valuation is down slightly this year – from $5 billion to $4.8 billion.
To get back to work and try to increase that number again, Hexa is also moving into a brand new office called La Cristallerie. The team will host meetings there and new startups will work from there first before getting their own office.
Image Credits: Hexa
