Hyperloop One, a start-up spending millions in a race to build the world's first hyperloop, has secured another round of funding to develop a system that will transport people through tubes at ultra-high speeds.
The company announced it had raised $80 million in Series B financing on the eve of a demonstration its hyperloop system at a test track north of Las Vegas, Nevada. The funding comes from a number of venture capital firms looking to be part of a new mode of transportation.
"The overwhelming response we've had already confirms what we've always known, that Hyperloop One is at the forefront of a movement to solve one of the planet's most pressing problems," said Hyperloop One co-founder and Executive Chairman Shervin Pishevar.
The hyperloop idea was introduced in 2013 by Tesla and SpaceX CEO Elon Musk. His vision: transport people in capsules through tubes with very low air pressure using propulsion technology that could move the pods at speeds of up to 800 miles per hour (MPH). At that speed, people could make a trip from Los Angeles to San Francisco in 35 minutes.
Hyperloop One's demonstration and funding announcement comes just days after another start-up, Hyperloop Transportation Technologies, said it would utilize passive magnetic levitation to propels pods through tubes at up to 760 MPH.
"From a safety aspect, the system has huge advantages," said Hyperloop Transportation Technologies Chief Operating Officer Bibop Gresta. "Levitation occurs purely through movement, therefore if any type of power failure occurs, Hyperloop pods would continue to levitate and only after reaching minimal speeds touch the ground."
Hyperloop Transportation Technologies plans to build its first hyperloop system as part of a planned community in central California that will be operating by late 2018.
Meanwhile, Hyperloop One is planning its own larger-scale test track as it moves toward eventually building a its own version of the hyperloop.
There's little doubt the public would love to travel hundreds miles in under an hour instead of spending several driving in a car, riding in a train or taking a plane. But taking the hyperloop from concept to reality will mean overcoming several hurdles, including costs that could climb into the billions and bureaucratic red tape that goes along with building transportation systems.
Experts are curious to see if hyperloop will live up to the potential it shows on paper.
"The fact that hyperloop is only confined to just a few firms suggests to me that it is just way too exploratory," said Brookings Institute's Cliff Winston. "If this thing really were promising I would like to see a number of private sector ventures displaying interest in it and investing in it ."
With $80 million in Series B funding, following an initial round of fundraising totaling $11 million, Hyperloop One is clearly attracting investors. Its competitor, Hyperloop Transportation Technologies, is likely to embark on its own round of private funding later this year.