In the last 11 years, eFounders has refined the startup studio model in Europe. The company has helped launch more than 30 startups, including three unicorns: expense table, air call Y Front.
While things seem to be going well for the startup studio, eFounders is spinning, sort of. Starting today, eFounders is becoming Hexaa holding of different startup studios.
You might have seen this change coming as eFounders hasn’t been single eFounders for a while. In addition to its initial study focused on the future of work, eFounders has already launched two new studies: logical founders for fintech startups and 3founders for new web3 companies.
Hexa will be running three different studios: Logic Founders, 3founders, and yes, eFounders. So what’s going on with eFounders?
“I started writing a LinkedIn article saying this is the last time I write as the founder of eFounders,” eFounders co-founder Thibaud Elzière told me. But it won’t go anywhere as the eFounders core team will just work for Hexa now.
As with the other Hexa studios, there is a dedicated eFounders team with a head of studio and a core team of product people. Matthieu Vaxelaire is now at the helm of eFounders.
Combined, the Hexa companies have hired 3,000 people and reached a total valuation of $5 billion. And Hexa is not going to change its formula in the future. Hexa startup studios combine an idea with a founding team.
The study team then provides resources and help to launch a product. After raising some funds, the startups gain their independence and the startup studio can move on and focus on new projects.
“We hit a limit when it comes to scalability. It is a virtuous model, but it is also a very artisan work”, Elzière told me. In addition to supporting Hexa’s existing studies, the company wants to launch studies around new verticals, such as climate, education and health.
But it will depend on the studio heads they meet and end up hiring. Hexa aims to launch two new studios next year.
“It’s a crazy bet for us. We are creating a brand from scratch. And we’re doing it because eFounders is a strong brand when it comes to SaaS startups, but also because eFounders was dwarfing other studios,” Elzière said.
A 30% stake
“What we are doing with Hexa is that we are democratizing team entrepreneurship. We offer an alternative to traditional entrepreneurship,” said Elzière. “Like many things in life, when you work as a team, it works better.”
But that doesn’t mean that Hexa and its startup studios are pitching new startups for fun. They are taking a significant stake in each new startup.
“We want to launch more startups. But it costs us about €800,000 to set up a company. We can invest some money ourselves or we can create a small fund like Y Combinator. Investors could chip in and they would end up on the cap table.”
When Hexa startup studios launches a new startup, they try to keep a 30% stake in the company after raising a seed round. With outside investors, Hexa could reduce its stake to something like 25% and investors would get 5%.
Hexa’s participation would be split between Hexa and each startup study. “You would have 5 to 10% that would go to the studio head and his team,” Elzière said. The bottom line is that Hexa and its partners would still have a 30% stake. It would then be divided among various partners.
“That deal may seem a bit unfair,” Elzière said. But he believes that the eFounders’ track record speaks for itself. With approximately 3 unicorns out of 30 portfolio companies, entrepreneurs are more likely to create a unicorn with the help of eFounders than without. Essentially, founders can potentially get a smaller piece of a bigger pie.
The life and death of startup studies.
But where exactly does Hexa come from? It comes from the hexadecimal numbering system. In particular, hexadecimals are used to represent binary digits (0 and 1) in computer programming. Each hexadecimal character represents a sequence of four binary digits.
“For me, it is the simplest expression of the human-machine interface,” said Elzière. As a bonus, designers also use hexadecimal characters for color codes.
He believes that startup studios will work just like startups. Some of them will prosper, others will fail. “Studios will have a certain shelf life. At some point, they’ll run out of power because the studio head won’t be there anymore or there won’t be any opportunity left,” Elzière said. As always, we will judge the quality of Hexa’s work by the new ventures that emerge from those studies.
