Good morning Sifted reader,

There are major changes afoot at what was one of the most successful startups during the pandemic boom times of 2020, as virtual events platform Hopin sells off its flagship product and founder Johnny Boufarhat steps down as CEO. We get into that below. Also on the agenda today:

Hopin CEO steps down and sells off flagship product

If ever a startup got lucky with timing, it was Hopin. The virtual events platform, reading the tea leaves as the pandemic spread around the world in March 2020, brought its launch forward to that month — and saw the kind of astronomical growth most founders and VCs only have wet dreams about.

Just a year later, in March 2021, it hit a $5bn valuation, becoming the fastest-growing European startup ever. By August that year, it had raised more than $1bn in total and reached a $7.8bn valuation. Its cap table read like a who’s who of VC: Seedcamp, Northzone, Accel, Tiger, Andreessen Horowitz, Coatue and General Catalyst all invested.

But, one early investor tells Sifted, all that hype and money didn't turn out to be a great thing.

“I think this could’ve been one of the great European success stories,” the investor says. “But after the first few rounds, when it got crazy and VC FOMO kicked in, it began to feel like ‘dumb money’ — even though it was coming from highly credible funds. They didn’t do due diligence and they didn’t inject governance provisions.”
There were also so many VCs keen to invest in Hopin that none ended up with an influential stake. “There were a bunch of sous chefs, but no chef running the kitchen, on the investor side,” they add.

That’s not to say some of those early investors won’t still make a tidy return on their investment.

Yes, Hopin has sold off its original platform this week — but it’s been left with a different product, which is by all accounts a good one.
And while its founder has stepped down as CEO, a change in leadership can often be positive for companies.
Hopin’s seed investors — Accel, Northzone and Seedcamp — also invested at an estimated £25m valuation, and the company is probably still be worth a lot more than that.

But for those that came in when the company was valued in the billions, there might be a few regrets.

Have something to add to this story? Email me confidentially: amy@sifted.eu

— Amy Lewin, editor

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