Hexa, a Paris-based startup studio, is expanding beyond its studio model to partner with later stage companies that have already found product-market fit, just a few weeks after announcing $22 million in funding.
The startup studio’s Hexa Scale program seeks B2B companies that already generate significant recurring revenue (ideally between €1 and €10 million per year), but are experiencing growth challenges.
These firms may have raised a seed round and even a Series A round, but they are now expanding at a linear rate. That is when Hexa intends to step in, inject capital, and assist with operations, international expansion, product development, and marketing.
Paul Graham, co-founder of Y Combinator, wrote an essay titled ‘Startup = Growth’ in 2012. That essay has shaped the narrative around the ideal growth trajectory for a startup in many ways. Instead of increasing revenue by a specific amount, he believes that startup founders should focus on achieving a specific growth rate.
This is because growth rates can be easily compared quarter over quarter and year over year. Another reason that focusing on a growth rate can be beneficial is that if a company can maintain the same growth rate over time, it will grow exponentially.
And VCs adore startups with an exponential growth trajectory. A company that grows at a linear rate will have difficulty raising additional funding rounds (even though there is nothing wrong with linear growth in and of itself). At the same time, that company is likely to have a large team with high operating costs.
Instead of leaving those companies in that strange position, Hexa wants to assist them in re-establishing themselves as startups with exponential growth. Augustin Celier will oversee this new venture. He has previously co-founded several businesses, including Uptime, Shuffle, Marc&Aurèle, and CoursdePhilo.
“I’ve been building companies for the last 15 years. 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,” Celier said in a statement. Hexa Scale represents a third path.
While Hexa is best known as the startup studio that gave birth to some successful B2B SaaS startups such as Front, Aircall, and Spendesk, this isn’t the first time Hexa has considered later stage companies. It has already collaborated with Yousign, which now processes over 5 million e-signature per month for 17,000 customers.
