Hyperloop One

What did it do?

Hyperloop One set out to commercialise the hyperloop concept: carrying passengers and freight in pods levitated by magnetic systems inside partially evacuated tubes. The Los Angeles-based company built a 500-metre test track in Nevada and signed feasibility studies and letters of intent for routes stretching from India to the Middle East. Between 2017 and 2022 it traded under the Virgin brand.

Why did it shut down?

Although it made progress in technical testing, the company never secured a contract from any government or customer to build an actual line. In February 2022 it abandoned passenger transport to focus on freight and cut half its workforce, more than a hundred people. The Virgin name was dropped from the brand in November 2022, and a second round of layoffs followed in December 2022. In December 2023 the company announced it would cease operations on 31 December, citing financial difficulties, high interest rates and its failure to win contracts. Its assets were put up for sale, and its intellectual property was reported to be passing to its majority shareholder, DP World.

The story

On 8 November 2020, at the test site near Las Vegas, co-founder and chief technology officer Josh Giegel and director of passenger experience Sara Luchian climbed into a pod inside a low-pressure tube. The pod reached 172 kilometres per hour, completing the first crewed journey using hyperloop technology. It was a triumph that came after more than 400 uncrewed tests; yet the company had only three years left.

The story goes back to a conversation between Elon Musk and investor Shervin Pishevar on a flight in January 2012. Pishevar brought in former SpaceX engineer Brogan BamBrogan as co-founder, and the company was founded in June 2014. Forbes put the start-up on its cover in February 2015. Money came from investors including Sherpa Capital, Formation 8, 8VC and DP World, Dubai's port operator. In 2016 BamBrogan left the company and sued its management; the parties settled the same year. By December 2017 total investment had reached $295 million, and a partnership with Virgin Group made Richard Branson chairman. By May 2019 the company had raised more than $400 million.

The company built the 500-metre DevLoop test track in Nevada and ran its first full-scale test in May 2017. A letter of intent was signed in India for a line between Mumbai and Pune, and a certification centre was planned in the US state of West Virginia. None of these projects, however, ever turned into a construction contract. In February 2022 the company dropped passenger transport to focus on freight and laid off half its staff; the West Virginia facility was later cancelled too. In November 2022 the Virgin name was removed from the brand.

In December 2023 the company announced it would cease operations on 31 December, citing financial difficulties, the high interest-rate environment and the fact that it had never found a contract for a working hyperloop system. Its assets were put up for sale and the remaining employees were laid off. According to The Verge, all of its intellectual property was to pass to its majority shareholder, DP World.

Hyperloop One's story is a reminder that an impressive technical demonstration is no substitute for a customer in a market that depends on public decisions, as infrastructure does. The pod travelling through the tube worked; a buyer for the line to carry it never appeared.

Lessons for founders

• If you are building infrastructure-scale technology, try to sign your first customer, often a public body, before the prototype; a test track is no substitute for a contract.
• Do not leave the switch from a showpiece goal to a smaller but sellable one, as with the pivot to freight, until the last minute; make it before your cash runs out.
• Resolve disagreements within the founding team early and through agreed rules; disputes that end up in court wear down both the team and the investors.

Sources

1. Hyperloop One (Wikipedia)
2. Hyperloop One to Shut Down After Failing to Reinvent Transit (Bloomberg, 2023-12-21)
3. The hyperloop is dead for real this time (The Verge, 2023-12-21)
4. High-speed train company Hyperloop One shuts down (BBC News, 2023-12-22)
5. https://www.wikidata.org/wiki/Q19605534
6. Wikipedia (English)

This section is compiled from public sources (Wikidata, news archives and company announcements). Figures are given as they appear in those sources; unknown fields are left blank. If you spot a mistake in an entry, you can send us a correction.

Is something in this entry wrong? Request a correction → Method