The archive · Space, Robots, Defence · Financial decision · 2016
Hyperloop One raises $50M led by DP World and hires Uber's ex-CFO to build tube transport
After a cofounder lawsuit, Hyperloop One raised $50M led by port operator DP World and hired Uber's former CFO to keep building tube transport.
Hyperloop One
What the business is
Developing hyperloop transport — passenger and cargo pods propelled through low-pressure tubes — with an open-air test track in Nevada; in 2016 one of two venture-backed companies chasing the concept.
How it started
Elon Musk floated the hyperloop concept in 2012 — pods riding through low-pressure tubes at up to 700 mph as a cheaper alternative to high-speed rail. Shervin Pishevar and Brogan BamBrogan co-founded Hyperloop One (originally Hyperloop Technologies) to build it. By mid-2016 the venture-backed company was testing at an open-air track in Nevada, while a separate, crowdfunded company, Hyperloop Transportation Technologies, chased the same idea.
What happened
In July 2016 BamBrogan and three colleagues sued Hyperloop One and Pishevar, alleging breach of fiduciary duty, wrongful termination and more; Hyperloop One countersued and amended its complaint in late August, accusing the group of plotting a mutiny and a competing venture. Three months later, on 2016-10-13, Bloomberg reported a $50M raise led by DP World — which operates 77 marine terminals and saw hyperloop as a way to move containers inland — plus the hiring of Uber's former CFO. The HN discussion read the round as proof the company had steadied itself after the fight, while skeptics argued that $50M could not buy more than a token test line and that the company had drifted from Musk's original design.
No ending yet — it is still running.
Background
Elon Musk floated the hyperloop in 2012: pods riding through low-pressure tubes at up to 700 mph, pitched as a cheaper alternative to California high-speed rail. Shervin Pishevar and Brogan BamBrogan co-founded Hyperloop One, originally Hyperloop Technologies, to build it. By mid-2016 the venture-backed company was testing at an open-air track in Nevada while a separate crowdfunded company, Hyperloop Transportation Technologies, pursued the same concept from a different angle.
In July 2016 BamBrogan and three colleagues sued the company and Pishevar for breach of fiduciary duty, wrongful termination and more; Hyperloop One countersued and amended its complaint in late August, painting the departing group as plotting a mutiny and a rival venture. The public fight threatened the company's ability to raise. On 2016-10-13 Bloomberg reported a $50M round led by DP World, the port operator with 77 marine terminals, which saw hyperloop as a way to move containers from terminals to inland ports. Hyperloop One also hired Uber's former CFO.
On Hacker News the round drew 214 points and 195 comments on 2016-10-14. Supporters read the DP World investment as serious strategic money from a government-backed operator; skeptics argued $50M could not fund more than a token test line, questioned whether a miles-long low-pressure tube could ever beat high-speed rail economics, and noted the company had moved from Musk's air-cushion design toward maglev pods in a tube.
What has to be true
- Musk's 2012 concept created a category, and multiple companies raced to own it; Hyperloop One's edge was venture capital and an open-air Nevada test track.
- DP World invested as a potential customer, not just a backer: moving containers from marine terminals to inland ports gave hyperloop a concrete freight use case before passenger service existed.
- The former-Uber-CFO hire and the round together signaled stability after the July lawsuit, letting the company pitch 'back on track' rather than 'in litigation'.
- The skeptics' core objection never went away: whether a long low-pressure tube could be built at a cost that beat high-speed rail or trucking.
What can be applied
After a public cofounder war, a strategic customer-investor round and a senior CFO hire can restore confidence; whether the underlying bet is sound decides if that is rescue or just delay.
Aftermath
As of 2016-10-14 Hyperloop One was still in the building stage: no passenger or cargo line operated, and the company was validating its approach on the Nevada open-air test track while saying it planned three lines running by 2020. The $50M round and the former-Uber-CFO hire came three months after the BamBrogan lawsuit, which remained unresolved. HN commenters split between those who saw the raise as proof that serious infrastructure money would fund the concept and those who argued $50M was nowhere near enough to build even a short commercial tube.
Sources
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