(Bloomberg) — Hyperloop One, the futuristic transportation company that builds tube-encased lines to move passengers and cargo from city to city at airplane speeds, is closing, according to people familiar with the situation.
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Once a high-profile startup, Hyperloop One has raised more than $450 million since its founding in 2014, according to PitchBook. It built a small test track near Las Vegas to develop its transportation technology, and for a time adopted the name Virgin Hyperloop One, after Richard Branson’s Virgin invested. Virgin removed its brand name after the startup decided last year to focus on cargo instead of people.
Now the company has laid off most of its employees and is trying to sell its remaining assets, including the test track and machinery, said one of the people, who asked to remain anonymous discussing private information. At the beginning of 2022, the company employed more than 200 people. The company has also closed its Los Angeles office. The remaining employees, charged with overseeing asset sales, were told their employment would end on December 31.
DP World, the Dubai-based conglomerate, has backed Hyperloop One since 2016 and owns a majority stake. The startup’s remaining intellectual property will be transferred to DP World, a person familiar with the situation said.
Through a spokesperson, DP World declined to comment. Raja Narayanan, acting CEO of Hyperloop One, also did not respond to requests for comment.
Hyperloop One, formally known as Hyperloop Technologies, merged with a shell company in April, according to a document reviewed by Bloomberg. At the time, the value of shares in most classes was written down to zero cents, and the shell company’s shareholders became the sole owners of Hyperloop One. During an all-hands meeting, employees were told that DP World had orchestrated the transaction, one of the people said.
The company has captured the public’s imagination since its founding in 2014, a year after Elon Musk released a white paper outlining a vision for hyperloop technology. The concept was a seductive promise of a new kind of transportation technology – and an end to traffic.
But the nascent industry stumbled, and Hyperloop One never won a contract to build a working hyperloop. The company also attracted a lot of attention for the wrong reasons. Co-founder Brogan BamBrogan once came to work and found a noose on his chair. And another co-founder, venture capitalist Shervin Pishevar, stepped aside after Bloomberg reported on sexual harassment allegations against him, which he denied. A former executive, Ziyavudin Magomedov, was arrested in Moscow on charges of fraud and embezzlement unrelated to Hyperloop One. Magomedov’s lawyer said at the time that he would appeal the arrest.
Although no large-scale hyperloop has been built after years of effort, the concept continues to enchant entrepreneurs. Several hyperloop companies are in various stages of building prototypes, including Hardt Hyperloop, Hyperloop Transportation Technologies Inc. and Swisspod Technologies.
Musk has also promoted the field by organizing a series of competitions for student-designed hyperloops and building a now-demolished test track. He also started Boring Co., a tunneling company that has pursued related technology.
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