eFounders developed the European startup studio model over the last 11 years. The company has contributed to the launch of more than 30 different startups, including three unicorns — Spendesk, Aircall and Front.
While things seem to be doing well for the startup studio, eFounders is pivoting — sort of. eFounders has become Hexa as a holding company to support different startups studios.
You could have seen this change coming as eFounders hasn’t been Just For a time, eFounders. In addition to its initial studio focused on the future of work, eFounders has already launched two new studios — Logic Founders for fintech startups and 3founders for web3 startups.
Hexa is going to run three different studios — Logic Founders, 3founders and, yes, eFounders. What’s the deal with eFounders?
“I started writing a LinkedIn article saying that it is the last time I’m writing as the founder of eFounders,” eFounders co-founder Thibaud Elzière told me. He isn’t going anywhere, as Hexa will continue to be the eFounders Core Team.
Just like with Hexa’s other studios, there is a dedicated eFounders team with a head of studio as well as a core team of product people. Matthieu Vaxaire now leads eFounders.
Hexa’s companies together have employed 3,000 workers and are valued at $5Billion. And Hexa isn’t going to change its formula going forward. Hexa’s startup studios match an idea with a founding team.
Once a product is launched, the studio team provides support and resources. Once they raise some capital, startup founders can become independent. The studio then has the ability to focus on their next projects.
“We reached a limit when it comes to scalability. It’s a virtuous model but it’s also very much handcrafted work,” Elzière told me. In addition to supporting Hexa’s existing studios, the company wants to launch studios around new verticals, such as climate, education and health.
It will all depend on the heads of each studio they work with and whether or not they hire. Hexa plans to open two studios in the next year.
“It’s a crazy bet for us. It’s a new brand. And we are doing that because eFounders is a strong brand when it comes to SaaS startups, but also because eFounders was outshining other studios,” Elzière said.
An additional 30% of the stake
“What we are doing with Hexa is that we are democratizing team entrepreneurship. We offer an alternative to traditional entrepreneurship” Elzière said. “Like a lot of things in life, when you work as a team, it works better.”
But that doesn’t mean that Hexa and its startup studios are launching new startups for fun. Each startup is a substantial investment for them.
“We want to launch more startups. But it costs us around €800,000 to launch a company. You have two options: invest your own capital or you could start a small fund, such as Y Combinator. Investors could contribute and they would end up on the cap table.”
When Hexa’s startup studios launch a new startup, they try to keep a 30% stake in the company after raising a seed round. Hexa might lower its stake to 25% through third-party investors. Investors would receive 5%.
Hexa’s own stake would be split between Hexa and each startup studio. “You would have 5 to 10% that would be allocated to the head of studio and their team,” Elzière said. Hexa, along with its partners, would keep a 30% interest. It would then be divided among multiple partners.
“That deal might seem a bit unfair,” Elzière said. But he thinks eFounders’ track record speaks for itself. Entrepreneurs are three times more likely than with eFounders to create a unicorn out of thirty portfolio companies. It is possible for founders to get less of a larger cake.
Startup Studios: Life and Death
So where exactly does Hexa come? Hexa comes from the numbering system of hexadecimal numbers. Hexadecimals can be used in programming to denote binary digits (0 or 1), and are particularly useful for this purpose. Each hexadecimal symbol represents a sequence of four binary numbers.
“For me, it’s the simplest expression of the human-machine interface,” Elzière said. Designers can also use hexadecimal characters for color codes.
His belief is that startups studios can work in the same way as startup companies. While some of them may succeed, many others will go bust. “Studios will have a certain lifespan. At some point, they’ll run out of steam because the head of studio 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 startups that emerge from those studios.