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The illusion of scale-ups: when growth is no longer enough
The Scale-Ups ecosystem has long embodied the success story of venture capital: strong growth, series funding and international development. However, in 2024, the dynamics reversed: bankruptcies are multiplying among these companies that were believed to be unshakable. More than ever, access to capital is no longer a survival guarantee. How to explain this brutal tilting?
A presumption of solidity today denied
The transition to Scale-Up status was once perceived as a guarantee of maturity. Raising a C or D series involved market validation and a deemed financial seat. But recent figures demonstrate the fragility of good numbers of them: in 2024, the number of bankruptcies in scale-ups increased by 104 %, with a negative net balance of new serials in series A, according to The study by Scalex Invest.
This reversal is explained by a financing cycle which has suddenly contracted. Formerly doped by the influx of capital to overvalued valuations, these companies must now compose with more selective investors, demanding a clear trajectory towards profitability. However, a number of scale-ups have built their growth on extremely capital models, where each lifting was used above all to maintain hypercroissance rather than building an economic sustainability.
A dependence on the levees which has become a risk factor
The analysis of companies in difficulty highlights a recurring scheme: 71 % of startups that went bankrupt in 2024 had lifted a financing tour in the previous three yearsaccording to the report SCAlex Invest. Contrary to popular belief that funding constitutes a rampart against bankruptcies, on the contrary, it seems to be an accelerator when poorly exploited.
The scale-ups that collapse today often share the same characteristics: a growing growth artificially by successive liftingeconomic models still largely in deficit and a difficulty in pivoting towards a more sober in capital structure. The end of easy money requires rationalization that these companies, too used to financial abundance, fail to operate in time.
The illusion of hypercroissance as absolute norm
The venture capital market has long favored a development model based on rapid development and the conquest of market share before profitability. This axiom is crumbling. The general reduction in multiple valuation requires startups to review their prioritization: profitability and rigorous management of resources become imperatives, and no longer secondary objectives.
This change is particularly observed in the SaaS sector, where the subscription models formerly guaranteed wealthy funding on the basis of subscription growth. In 2024, SaaS scale-ups with levels of Burn rates high and an inability to reach a Cac sustable ratio see their access to drastically restricted funds.
Towards a new growth model?
The market is restructured around new requirements: an emphasis on financial fundamentals, strengthened budgetary discipline and increased requirement as to proof of the market. Investors are looking for companies which, beyond growth, demonstrate an ability to generate margin and control their financial trajectory.
