Zoom keeps adding 100,000 users per quarter. Event tech software startup Hopin is reportedly pursuing a $2 billion valuation, in its first year of launch. Many virtual event platforms are raising rounds of more than $30 million — and likely to grow bigger — for the first time in event tech history.
While the pandemic keeps impacting our lives, virtual events seem to be the only certainty. And every tech investor we know — and have talked to in the last nine months over at EventMB — wants a big piece of the pie.
“We’ll be back by the summer” was the mantra many people in events kept repeating when the wave of cancellations happened in March.
Seven months later, we are back to square one with Europe on the brink of a second lockdown and the U.S. experiencing a steady rise in Covid-19 cases.
While many sectors come to terms with the long-term devastation of a pandemic that does not seem to fade, the business of virtual events is booming.
Nobody saw it coming, but everybody now wants part of the action.
First it Was Zoom
Zoom was the outlier. The now household name singlehandedly drove the growth of the whole sector in the first few months.
Here are just some of the incredible numbers:
- 100,000 users added last quarter.
- $186 million in profit for the quarter ending July 31 compared to $5.5 million for the same period last year.
- 600 percent rise in stock values this year.
During its annual Zoomtopia event last week, Zoom announced a new event marketplace and the ability to charge for events. All of it hints for Zoom to become a platform company for events, even if not the event software of choice for larger professional events (though that could happen).
This is also a major move into ticketing for Zoom that aims directly at Eventbrite, one of the industry’s most hard-hit casualties of the pandemic and many others in the ticketing and registration software sectors.
This move alone adds billions to the valuation of a company that already had a $159 billion market capitalization.
Zoom Is Only Part of the Story
The others are not just watching this go by. Hopin is reportedly seeking a $2 billion valuation in a further fundraising round that would add to the $50 million already raised, according to a story by The Information.
Blue chip investors like Andreessen Horowitz that have never invested in events sector — Eventbrite is the only event software company exception we can think of that got blue chip investors like Sequoia involved — are jumping in for the first time, with big numbers.
This incredible for the event industry, where the only other companies that had previously made it were Cvent and Eventbrite — both of which ran with much lower valuations nurtured over decades and both of whose valuations (or at least previous businesses) have been decimated for now with the great reset of the event sector.
When we recently spoke with Hopin founder Johnny Boufarhat, he confirmed how submerged they were in demand. And they are not alone.
An army of event tech companies that used to do apps or other tools for live events eyed the opportunity early on and embarked in a pivot that opened up a market they could only dream of before the crisis. While technology was a ‘nice to have’ for in-person events, it is now the key expense as almost all events go virtual.
Over the past six months, EventMB has worked, spoken, and engaged with more than 130 virtual event platforms. Their story is the same. Even the tiniest company cannot keep up with demand. Between existing clients who want to transition to virtual and new business, they made more revenue in the last few months than in the last few years.
More Rounds Are Coming
What is clear is that we are only at the beginning of the virtual event revolution. With the pandemic continuing and many investors sitting on piles of cash, we can only anticipate more rounds. This is not just speculation, it is a certainty. Many sources we have talked to have informally discussed with us rounds of over $30 million. And as expectations evolve, new players are joining. The advancements of the past six months are more than we have seen in a decade.
Should things continue at this rate, the virtual event technology market has the potential to grow exponentially in value.
As the actual products still remain unsophisticated — think online music software, circa 2002, as Skift Founder Rafat Ali said in his popular essay a couple of months ago — event planners scream for more features and event owners seek more business ROI from their event. From better production to effective networking, there is still a lot of space for substantial disruption.
Investors are excited, founders are busy, teams are overwhelmed and companies can’t hire fast enough. There is a lot to love for investors: anywhere from hundreds of dollars to tens of thousands of dollars charged per event, potential for recurring subscription/SaaS mechanics for the event tech companies, a truly global market, intersections with so many other sectors that depend on events, so much tech yet to be built, potential for platform mechanics for dominant players, huge acceleration of change cycle that will only come around once in a generation if that.
The biggest hype-busting caveat here: yes, event software companies have explosive growth in clients and revenues and audiences are showing up in big numbers for online events, BUT so far there is little evidence that event organizers are making any real money yet, the economics for them is being undercut in so many ways: consumer appetite to pay for today’s events using today’s software isn’t there yet; sponsorships and other revenue sources for event owners are a fraction for majority of them, though exceptions are there and arguably the promise of better ROI for them.
That could change with better software, better networking and more evolution of the consumer behavior to valuing the online events. Or the event industry could very well follow the story of what happened to online ad industry in the last two decades, with ad tech completely undercutting the revenue base for the legacy incumbents, much to the harm of everyone except a few giant players.
Even as the pandemic will pass into history books in coming years, the hybrid events world that will emerge could potentially have much better economics attached to it for everyone in the ecosystem. No one knows what it will look like, but everyone knows with naive certainty, it is coming.
This is the perfect recipe for a revolution in the industry. Welcome to the 0.1 version of it.
Julius Solaris is the founder and editor-in-chief of EventMB, the largest online media resource and events company for the event professionals worldwide, and as of last year, part of the Skift family.