Just a few weeks after announcing a $22 million fundraising, Paris-based startup studio Hexa is expanding beyond the studio model to partner with later-stage companies that have already found a product-to-market fit.
Called Hexa Scale, with this program, the startup studio is looking for B2B companies that already generate some significant recurring revenue (ideally between 1 and 10 million euros each year), but that are facing some growth issues.
These companies may have raised a seed round and even a Series A round, but are now growing at a linear rate. That’s when Hexa plans to step in, inject capital and help with operations, international expansion, product and marketing.
In 2012, Y Combinator co-founder Paul Graham wrote an essay titled ‘Startup = Development’. In many ways, this essay has shaped the narrative around the ideal growth trajectory for a startup. According to him, instead of growing revenue by a certain amount, startup founders should focus on a growth goal and achieve that goal.
This is because you can easily compare a growth rate quarter-over-quarter, year-over-year. Another reason why focusing on a growth rate can be useful is that a company grows exponentially if it can maintain the same growth rate over time.
And VCs love to back startups with an exponential trajectory. A company growing at a linear rate will struggle to raise further funding (even though there’s nothing wrong with linear growth per se). At the same time, this company probably also has a large team with expensive operating costs.
Instead of leaving these companies in this weird spot, Hexa wants to help them become exponentially growing startups again. Augustin Celier will be in charge of this new activity. He previously co-founded several startups — Uptime, Shuffle, Marc&Aurèle and CoursdePhilo.
“I’ve been building companies for the past 15 years. For my last venture, we ended up on a land that was funding nobody, which led us to a fire sale. Like many, we were faced with very narrow backer options: to stay on the VC track, you need constant overgrowth, while you have to settle for slow, linear growth to go the self-funding or Private Equity route,” Celier said in a statement . Hexa Scale represents a third path.
While Hexa is best known as the startup studio that built some successful B2B SaaS startups like Front, Aircall and Spendesk, this isn’t the first time Hexa has looked at later-stage companies. It has already partnered with Yousign, which now processes more than 5 million e-signatures per month for 17,000 clients.
