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.
Called Hexa Scale, with this program, the startup studio is looking for B2B companies that already generate some significant recurring revenue (ideally from €1 to €10 million every year), but that are facing some 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. That’s when Hexa plans to step in, inject capital and help when it comes to operations, international expansion, product and marketing.
In 2012, Y Combinator co-founder Paul Graham wrote an essay called ’Startup = Growth’. In many ways, that 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 target growth rate and reach that target.
That’s because you can easily compare a growth rate quarter over quater, year over year. Another reason why focusing on a growth rate can be helpful 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 that grows at a linear pace will have a hard time raising further funding round (even though there’s nothing wrong with linear growth by itself). At the same time, that company also likely has a big team with expensive operating costs.
Instead of letting those companies in that weird spot, Hexa wants to help them become startups with exponential growth 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 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 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 is looking 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.