Hopin: The difficulties of starting virtual events as real gatherings return
In November 2020, with the pandemic in full swing, British virtual events start-up Hopin said a new era of digital gatherings had begun.
Virtual events were “here to stay,” said founder Johnny Boufarhat, boasting that there were “more than 15,000 monthly events” available on Hopin’s “Explore” platform. Today, there are less than 500 listed.
Boufarhat’s vision has made Hopin a pandemic sensation and the fastest growing start-up in Europe. Launched in 2019, his company shot to fame after Covid struck with a conferencing product that seemed tailor-made for lockdowns.
The 27-year-old raised over $1 billion for Hopin in just over a year, hitting a $7.8 billion private market valuation that made him the youngest self-made billionaire in history. Great Britain on paper.
As top venture capital firms like IVP, Andreessen Horowitz and Tiger Global clamored to invest, Boufarhat sold $195 million worth of its own shares, according to a Financial Times analysis.
As Covid begins to recede and publicly traded tech stocks are dumped by investors, Boufarhat now faces a moment of truth as he attempts to build a sustainable business that lives up to the high expectations he has set himself. is fixed during the pandemic.
“The landscape will be very different in the future. People can now meet,” an events industry official noted. They called the pandemic-driven boom in online events “a bit like an artificial bubble.
The drop in registrations on Hopin Explore, billed as an “event market” for virtual and hybrid gatherings but considered a “flop” by a former employee, is just a sign that Hopin is facing tougher days. .
In February, the company laid off 12% of its staff, or about 138 people. Hopin has a fully remote workforce and no offices. At the time, Hopin said it was “reorganizing to align with our goals of increased efficiency and sustainable growth.”
The market price of Hopin shares fell 41% during the first quarter on Zanbato, which operates a private secondary market, according to company data. A broader index maintained by Zanbato fell 1% over the same period.
Hopin softened the blow of the layoffs with generous severance packages, but the effort was undermined by Boufarhat’s comments during a subsequent company-wide virtual meeting, according to people familiar with the matter.
A person briefed on the comments said Boufarhat joked about the number of people there, saying, “I guess we got rid of more than I thought.”
Hopin said Boufarhat “immediately regretted his choice of words and apologized to the team.” He said hybrid events remained a big area of opportunity for the company, adding: “As 79% of event marketers in EMEA plan to host hybrid events in 2022, we are currently executing our vision to to offer the most transparent, hybrid solution on a single platform.
Explore was started to publicize events open to everyone, but much of Hopin’s focus has now shifted to hosting invite-only corporate events, such as sales meetings or employee meetings. It is also developing a wider range of tools, including for physical events.
The company said Hopin Explore is “a nice tool that we’ll probably spend more time and attention on in the future, but it’s not currently an area of focus.”
Hopin topped $100 million in annual revenue last year and didn’t need to spend much of the money it raised, a person familiar with the company’s finances said.
Boufarhat, who was born in Australia and later studied at the University of Manchester, was a little-known budding UK-based entrepreneur who had only raised seed funding for Hopin when the pandemic hit.
He said the idea for Hopin was born out of a 2015 bout of illness that left him immunocompromised and at times housebound. The experience got him thinking about online networking.
Boufarhat’s other ventures have included a curated written content discovery platform called Readory and an online speed dating company called Quiin. Some of Quiin’s code has been integrated into Hopin, according to people familiar with the matter.
He blogged as well as coded. In an article published in 2016, he railed against the “globalists”; another was titled “How Hillary Clinton Tried to Rig the Election”. Hopin noted that Boufarhat was 22 at the time, adding, “His views have evolved and he wouldn’t publish them today.”
When Covid hit, Hopin surged as event organizers rushed to move online to avoid canceling events outright. Hopin offered more features for large gatherings and conferences than companies like Zoom. “The Covid situation helped the business jump very quickly,” said a second former employee.
As customers flocked to the company, so did big investors, and the extraordinary demand allowed Boufarhat to sell $195 million of his own stock, or about one-fifth of his stake. He now owns just under 40% of Hopin but retains voting control.
In a podcast last year, Boufarhat was candid about the influence he had on Hopin’s backers, saying that while he was always transparent with investors about the company’s performance, he didn’t. didn’t like giving them contractual rights to the information.
“I don’t want you monitoring, controlling, being able to request information whenever you want, disturbing our vice president of finance who is busy with an acquisition and three other things while we move at a speed lightning fast,” he said on the Twenty Minute VC podcast.
Some of this rapid growth is due to acquisitions, most notably in December 2020 when the company acquired live streaming site StreamYard for $250 million. The move effectively doubled Hopin’s annual recurring revenue to $65 million at the time.
A venture capitalist who stopped investing in Hopin last year said he considered the valuation too high at the time because the company had been boosted by the StreamYard and Covid deal. They recalled Boufarhat arguing in response that Hopin was growing faster than its competitors.
Hopin said a StreamYard product for business customers launched last year had attracted customers like Amazon and Microsoft and “exceeded its targets.”
“Our investors believe in our vision to bring the world together and we are in a strong financial position,” the company said. “We will continue to invest in our growth and build an impactful business.”
Additional reporting by Max Harlow and Tim Bradshaw