In July 2021, the virtual events startup Hopin was considered the fastest-growing startup in the world. Now, it's laying off 29% of its staff, following a previous cut of 12% back in February. With hiring now frozen, and marketing budgets slashed, a startup that was once worth $7.8 billion at its peak has stumbled—like many other pandemic winners—as restrictions have been lifted around the world.
Hopin, which was founded in 2019, hosts online conferences for companies like Slack, Dell and Unilever. The new cuts add up to 380 layoffs this year, as the startup tries to focus on “sustainable growth” after the pandemic supercharged its business.
The company, which is run as a remote team, has raised over $1.1 billion total in a lightning succession of rounds from top investors Andreessen Horowitz, Accel, Tiger Global and IVP. In July 2021, Hopin raised $470 million at a $7.8 billion valuation in a round led by Arena Holdings and Altimeter Capital. With the influx of cash came soaring head count: After acquiring six smaller companies in the space of just six months, Hopin had over 1,000 employees. CEO and founder Johnny Boufarhat, who recently moved to Switzerland, sold around $150 million of Hopin stock in the last fundraising.
Boufarhat talked last July about preparing the company to go public in 2022, but the Russian invasion of Ukraine, and rising interest rates, sparked a major stock market sell-off earlier this year. The plunge in the valuation of publicly-listed competitors — Zoom which caters to smaller virtual events, has seen its stock plummet 71% over the last year — has started to filter through to startups like Hopin. At least 21,000 staff have been laid from US-based startups since the start of the year, according to Crunchbase data.
Hopin executives said they had warned staff earlier this month that further cuts might be needed because of the “macroeconomic conditions” and the company’s new focus on profitable growth. Other so-called “pandemic winners” like Zoom, Peloton and Netflix have seen growth stall as offices, gyms and cinemas have reopened over the last year.
“We’ve made the very difficult decision to reduce our workforce given the current macroeconomic climate and need for our events product to move forward efficiently,” says a spokesperson for Hopin in a statement. “While we took preventative measures before looking at a more significant restructure, it became necessary to simplify our events business and supporting operations to build a profitable and sustainable company.”
Hopin says that staff involved in the cuts would get three months of compensation and benefits, share vesting options would be relaxed, and they would be allowed to keep company laptops.
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July 12, 2022 at 02:00AM
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Digital Events Company Hopin Lays Off 29% Of Staff As Its Pandemic-Fueled Growth Stalls - Forbes
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