Hopin recently announced the sale of its Events and Session products to RingCentral, which has now disclosed in an SEC filing an upfront purchase price of $15 million for the assets – a price that could climb to $50 million based on the achievement of specified undisclosed performance targets.
Hopin retains the StreamYard and Streamable products that make up most of its revenue. It has also just launched a community platform called Superwave, previously known as Project C. The company is divesting from the events space, keeping its foothold in streaming and video, and has a new focus on online communities. These moves seem reasonable from a business perspective but are a bad sign for the future of virtual events.
While Hopin’s growth was unprecedented, its eye-popping valuation and total funding of more than $1 billion came at a time of easy money and pandemic-induced hype. Hopin had a staff of around 1,200 at its peak, a far cry from Cvent’s 5,000+.
The problem was Hopin lacked a solid revenue stream, particularly from its core virtual event platform.
What This Means For the Wider Industry
It’s clear that post-pandemic, the virtual events market industry is shrinking. Technology companies focused primarily on virtual events have struggled. Hopin’s fall from grace has real implications for investors and also for the meetings industry as a whole.
For one, this sale sets an incredibly low benchmark for companies looking to sell virtual event technology assets. This type of technology has been commoditized, and founders should not expect the big returns that may have been possible during the pandemic.
Current Hopin clients will move to RingCentral, but many are likely to jump ship. Working with a company that understands live events are important to planners, regardless of how good a software tool may be. While the company will certainly want to retain customers, it is unclear what kind of service level it is willing to provide to planners who may already be worried about the acquisition.
There is also the subject of data privacy to unravel. The notion that the platform will become the hub for virtual event activity — somewhere between being the Facebook and Eventbrite of virtual events — was baked into Hopin’s ambitious plans. To make this work, Hopin took a co-ownership of data approach, meaning that attendees needed to become Hopin users to access any event. This enabled Hopin to potentially market competing events to users. This marketplace opportunity is likely to have impressed many investors, but it failed to make an impact on users and caused a lot of tough conversations with planners about data privacy.
RingCentral Ventures Into Virtual Events
RingCentral is not a familiar name to the meetings industry. The U.S.-based company offers cloud communications, video meetings, collaboration, and contact center solutions for enterprise clients. It plans to integrate Hopin’s virtual event assets, the Events platform, and Session product as an offering to clients looking beyond video meetings and webinars on its current platform.
Sadly, the acquisition of Hopin was barely a footnote in RingCentral’s most recent earnings statement. “We expect the acquisition [of Hopin’s assets] to have an immaterial impact on our revenue and expenses in 2023,” said RingCentral Chief Financial Officer Sonalee Parekh. The acquisition was not mentioned at all in the related conference call. This may be in part to the company dealing with the long-time CEO Vlad Shmunis who, in a surprise move, announced he will be stepping down at the end of August. Its stock price has taken a big hit this week.
Where Does Hopin Go From Here
Founder Johnny Boufarhat is stepping down as CEO, with Badri Rajasekar, currently chief technology and product officer, to assume the CEO role starting next month. Rajasekar joined from the Jamm acquisition, where he was previously CEO.
A Unicorn Journey’s – The Hopin Timeline
- Founded in June 2019 by Johnny Boufarhat
- Raises an undisclosed amount in Pre Seed Round in October 2019
- Releases beta version of virtual events platform in February 2020
- Raises $6.5 million in February 2020 in Seed Round in February 2020
- (Covid pandemic lockdowns start in March 2020)
- Raises $40 million in a Series A in June 2020
- Raises $125 million in a Series B in November 2020
- Acquires Topi (mobile app) in December 2020
- Acquires StreamYard for $250 million in January 2021
- Recognized as Europe’s fastest-growing startup of all time
- Raises $400 million in a Series C at a valuation of $5.65 billion in March 2021
- Acquires Streamable and Jamm in March 2021
- Acquires Boomset (on-site event technology) in June 2021
- Founder sells $140million worth of secondary shares in June 2021
- Acquires Attendify (mobile app) in July 2021
- Raises $450 million in a Series D at a valuation of $7.75 billion in August 2021
- Lays off 12% of its workforce in February 2022
- Lays off 29% of its workforce in July 2022
- Splits product offerings and launches Session product in November 2022
- Events platform and Session product assets sold for $15 million to RingCentral in August 2023
Photo credit: Midjourney