A startup developing the next generation of sustainable high-speed transportation is shutting down, according to a new report.
Once backed by Richard Branson’s Virgin Group, Hyperloop One promised to create the next generation of sustainable high-speed transportation. However, the issue was that the startup made this promise in a period of easy money when interest rates were at the zero lower bound.
A source informed Bloomberg that only a few Hyperloop One employees remain. They’re tasked with selling the startup’s assets, such as a test track near Las Vegas and heavy equipment.
In 2022, the startup laid off 200 employees and closed its headquarters in Las Vegas. The remaining workers are set to be terminated on December 31.
Even with money set aside from the Biden Administration’s Infrastructure Investment and Jobs Act, the idea of a hyperloop system across the US never took off.
“Virgin removed its branding after the startup decided last year to focus on cargo rather than people,” according to Bloomberg.
Dubai port operator DP World has a majority take in Hyperloop One. Another source said all intellectual property from Hyperloop One will be transferred to the DP.
In April, Bloomberg obtained a document showing that Hyperloop One merged with a shell company, resulting in the shares being written down to zero. This allowed shareholders of the shell company to effectively take control of the Hyperloop One. Employees of the startup were told DP orchestrated the transaction, a source said.
All it took was a period of high interest rates to squash the next generation of sustainable high-speed transportation.