Yesterday, Axios broke the news that the newly-rebranded Virgin Hyperloop One will raise another $50m in private capital, and that Richard Branson will step in as chairman following former chair Shervin Pishevar’s sex scandal.
The cash infusion comes just 2 months after Virgin’s contribution and will be Virgin Hyperloop One’s third major investment in 6 months (for a total of $295m)
“Wait, I thought Elon Musk owned hyperloop?”
Well, kind of. Musk invented the underlying high-speed rail technology, called “hyperloop technology” that Virgin Hyperloop One plans to use for its high-speed tube train (Musk’s Boring Company is working on its own hyperloop as well).
The reason they’re allowed to use hyperloop tech is because, in true EM fashion, Musk made the design for hyperloop technology open to the public (like he did for Tesla’s electric cars back in the day) and encouraged anyone to build on them.
So why did he give everyone the recipe for his secret sauce?
The same reason VHO is burning through money so fast:
Cutting-edge technology takes a long time to turn a profit — and the fastest way to create a market is by luring competitors into the action.
Despite running 2 successful tests this year, VHO’s product still has no means of making money, and even if it did, they still don’t have regulatory approval for a full-scale rollout.
Talk about living in a house before you’ve built it…