Virgin Hyperloop One, Explained.

Michael Wenner
Jan 10th
What do you get when you put Elon Musk and a Silicon Valley VC together on an airplane ride to Cuba on a humanitarian mission? Perhaps the future of transportation.

Following a conversation the two had in 2012, Shervin Pishevar persuaded Musk to publish his thoughts on the hyperloop idea so that he could study them. The following year, Musk published the Hyperloop Alpha white paper detailing hyperloop.

What is a Hyperloop?

Essentially, hyperloop is a new method of transportation that moves people and freight in a hyperloop vehicle via electric propulsion through a low-pressure tube. The vehicle floats using magnetic levitation, moving at airline speeds for long distances. By using sealed tubes that are free of air resistance or friction, travel times are able to be drastically reduced.

A few months after the release of the white paper, Pishevar incorporated Hyperloop Technologies, which would later be renamed Hyperloop One. In the years that followed, the company would begin hiring engineers and other staff to create prototypes and test them in order to turn the futuristic idea into a reality.

Gaining Virginity

In 2017, Hyperloop One and the Virgin Group announced a strategic investment partnership, resulting in Virgin Group founder Richard Branson becoming chairman of the board of directors, as well as the company renaming to Virgin Hyperloop One.

However, Branson stepped down as chairman just over a year later, citing his busy schedule. "At this stage in the company’s evolution, I feel it needs a more hands-on Chair, who can focus on the business and these opportunities," Branson said at the time.

However, not mentioned in the press release was Saudi Arabia's cancellation of a deal they had struck with Virgin Hyperloop One to build a hyperloop network. Branson reportedly halted investment talks with the Saudis following the death of Jamal Khashoggi.

Fast and the Curious

To illustrate how much time Virgin Hyperloop One can save, the company compared the time it takes to travel between Los Angeles and Las Vegas via various modes of transportation. The comparison below shows the hyperloop is by far the quickest mode of transportation.

Car: 4 hr 17 min
Air: 3 hr 28 min
Rail: 2 hr 42 min
High-speed rail: 2 hr 8 min
Virgin Hyperloop One: 30 min

But can this method of transportation actually be implemented? That remains to be seen. However, a full-scale hyperloop was successfully tested all the way back in 2017. The company held a competition to help determine where to build hyperloop networks. The competition narrowed it down to ten routes spread out across the U.S., U.K. and India. The company has previously stated it hopes to have three functional hyperloop systems by 2021, however, that appears highly unlikely as there aren't currently any networks being built.

Funding and the Future

To date, Virgin Hyperloop One has received close to $400 million in funding from investors such as Virgin Group, Sherpa Capital, Abu Dhabi Capital Group and GE Ventures. Surprisingly, Musk is not involved or invested in the company in any way.

As New York City becomes an increasingly important part of the startup world, for the sake of everyone in the business, hopefully a hyperloop between Silicon Valley and New York City is on the horizon so you can go from one city to the other for a meeting in the morning and be back for lunch.

Tech News and Funding

The first unicorn of the new decade. ClassPass, which provides access to a variety of fitness classes via a subscription model, has raised $285 million in Series E funding at a valuation of $1 billion. ClassPass now operates in 28 countries and has more than 30,000 partners. ClassPass has also partnered with companies such as Morgan Stanley, Goldman Sachs, Google and Facebook to offer their employees access to the platform. The round brings the company's total funding to almost $550 million.
 
They're in the right business at the right time. BigID, which allows companies to track and govern their customer data at scale by bringing data science to data privacy, has raised $50 million in Series C funding. This is an extension of the Series C round, which saw BigID land $50 million in September. The company has now raised $144 million as privacy laws are quickly changing and become one of the top priorities of companies. The four-year old BigID, located in NYC, has 165 employees and plans to expand to more than 200 by the middle of the year. BigID did not disclose its valuation. 
 
Snap figured they might as well acquire them. Snap has acquired AI Factory, a startup they worked with to create the Cameos animated video feature. Snap didn't disclose terms of the deal, but it is believed they paid $166 million. Ironically, the founder of AI Factory is Victor Shaburov, who founded Looksery, which was acquired by Snap in 2015. Following the acquisition, Shaburov became Snap’s director of engineering before founding AI Factory in 2018. AI Factory, which is based out of Ukraine with an office in San Francisco, will relocate part of the team following the deal. 
 
This is borderline creepy. TypingDNA, which uses AI to recognize people based on the way they type, has raised $7 million in Series A funding, led by Google. TypingDNA says its technology has an accuracy rate of between 99% and 99.9% on both laptops and mobile devices. The company is working with industries that are concerned about identity and fraud, such as banks, financial apps, payment apps and government apps. The four-year old, 18-person startup is located in Brooklyn and is a graduate of Techstars NYC in 2018. 
 
TikTok is growing like a weed. TikTok saw its in-app purchase revenue jump 310% in the fourth quarter from the same period a year ago, according to Apptopia. On a dollar basis, TikTok saw its in-app purchase revenue increase from approximately $20 million in the third quarter to more than $50 million in the fourth quarter. It may be even better, however. SensorTower, which also tracks app purchases, estimates TikTok saw year-over-year growth of 521% to $87 million. 

 

 
View more blog posts

Join 110,000+ global shareholders and investors on EquityZen