Perhaps the least surprising stories I have read in recent weeks involved event tech companies shedding staff.

One such company, Hubilo, announced last week that it was laying off 12% of its workforce. And Hopin, perhaps the biggest name in the virtual event industry, recently lopped off 29% of its workforce. And this followed a 12% headcount reduction in February.

Both companies had raised gobs of cash before things started to take a turn. Hubilo, which launched in February 2020 imposed its layoffs just nine months after the U.S.-Indian company’s $125 million Series B round.

Hopin has raised more $1 billion since its 2019 founding. Hopin’s most recent round was in July last year when it raised $470 million at a $7.8 billion valuation. And founder Johnny Boufarhat sold $150 million of his stock as part of that round, according to Forbes. No doubt that comes up on the company Slack channel.

Virtual events certainly existed before 2020. But the industry found its footing in 2020 when the pandemic shut down one in-person event after the other. Every mega event from Dreamforce to SaaStr went virtual. And plenty of smaller niche events were also forced to forego assembling their tribe at the Ramada Inn by the airport in favor of virtual keynote addresses and virtual cocktail parties at the end of the virtual day.

Reassessing Demand

Now that in-person events have largely returned, it seems that the virtual event industry is facing a bit of a reckoning. This is despite the fact that most of these companies position themselves as hybrid platforms supporting virtual, hybrid, as well as in-person meetings. For the most part, their existence is tied to virtual events, which are waning with the pandemic.

We are seeing something similar happen in the virtual food space. Ghost kitchen and virtual restaurant platforms like Nextbite and Reef Technology cut staff. We are also seeing it in quick commerce.

Many European platforms are dramatically scaling back to adjust their businesses to reality and chase profits over growth. Many, like German quick commerce player Gorillas, vastly overestimated the demand for home-delivered bananas in 15 minutes or less in a post-pandemic environment.

Ain’t Nothing Like the Real Thing

As someone who has attended and produced both virtual and in-person events, I can attest to the benefits of both.

Virtual events eliminate much of the friction of live events. No air travel, no hotel, no days out of the office. As an organizer, it is much easier to convince an A-list speaker to join what is essentially a Zoom call than to fly across the country (or the world) to deliver a keynote in a hotel ballroom.

Yet, as any regular conference goer can attest, you can’t beat the relationship building that happens face to face. No clever virtual meeting room gimmicks even held a candle. And this helps explain why sponsors seem much more enthusiastic about investing the big money in live rather than virtual events.

Can the Metaverse Revive Virtual Events?

Just as the pandemic didn’t kill live events (it just put them in a coma), nor will the end of the pandemic completely kill off virtual events. Many organizations that did several live events each year will now produce the same number of events but as a mixture of live, virtual, and hybrid gatherings. But the virtual side of the game may need a new lease on life.

Perhaps that new lease will come from the metaverse. At least at some point down the road.

A recent article in Forbes Council post by Yellow.ai founder Raghu Ravinutala cites a number of practical near to mid-term practical applications for the metaverse. Among them were experiential virtual events.

And while Ravinutala used a rock concert to illustrate how this might work, it’s not hard to imagine applying the same concept to a splashy corporate event like Dreamforce.

“Just imagine the metaverse facilitating a rock concert at 10 different locations across the world at the same time. Case in point, Travis Scott’s concert in Fortnite featured his skyscraper-sized avatar directly interacting with over 12 million live viewers. Conversational AI will further enhance this experience via digital avatars that enable compelling audience engagements at scale, irrespective of time, geography or language.”

In the meantime, however, the virtual event space is probably overbuilt. And there may be more pain to come.