Just a couple of weeks after announcing $22 million in fundraising, Paris-based startup studio Hexa is expanding beyond its studio model to partner with later-stage companies that have already found product-market fit.
Introducing Hexa Scale
Called Hexa Scale, this program is designed for B2B companies that already generate some significant recurring revenue (ideally from €1 to €10 million every year), but are facing growth issues. These companies may have raised a seed round and even a Series A round, but they are now growing at a linear pace.
The Challenges of Linear Growth
This is when Hexa plans to step in, inject capital, and help with operations, international expansion, product, and marketing. In an essay called "Startup = Growth," Y Combinator co-founder Paul Graham wrote that instead of growing revenue by a certain amount, startup founders should focus on a target growth rate.
The Importance of Exponential Growth
According to Graham, focusing on a growth rate can be helpful because it’s easy to compare quarter over quarter and year over year. Additionally, if a company maintains the same growth rate over time, it will grow exponentially. Venture capitalists love backing startups with an exponential trajectory.
A company that grows at a linear pace, however, will have a hard time raising further funding rounds, even though there’s nothing wrong with linear growth by itself. At the same time, these companies often have big teams with expensive operating costs.
A Third Path: Hexa Scale
Instead of letting those companies in this weird spot, Hexa wants to help them become startups with exponential growth again. Augustin Celier, who previously co-founded several startups, will be in charge of this new activity.
"I’ve been building companies for the last 15 years," Celier said in a statement. "For my last venture, we ended up in a financing no-man’s land, which led us to a fire sale. Like many, we were confronted with very narrow support options: to stay on the VC track, you need continuous hypergrowth, while you need to settle for slow, linear growth to go down the self-financing or Private Equity route."
Hexa Scale represents a third path.
Hexa’s Experience with Later-Stage Companies
While Hexa is better known as the startup studio that spawned 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 customers.
The Benefits of Hexa Scale
With Hexa Scale, companies can expect to receive capital and support in areas like operations, international expansion, product, and marketing. This can help them overcome their growth challenges and become startups with exponential growth again.
The Future of Startup Studios
Hexa’s move into later-stage companies is an interesting development in the world of startup studios. With more and more startups looking for support beyond the early stages, it will be exciting to see how Hexa Scale evolves and whether other startup studios follow suit.
Conclusion
Hexa Scale is a new program designed for B2B companies that have already found product-market fit but are facing growth issues. By injecting capital and providing support in areas like operations, international expansion, product, and marketing, Hexa aims to help these companies overcome their challenges and become startups with exponential growth again.
Only time will tell how successful Hexa Scale will be, but one thing is certain – the world of startup studios is about to get a lot more interesting.
