Richard Branson. Photo by John Lamparski/Getty Images
Futuristic transportation startup Virgin Hyperloop One has agreed to raise $50 million in new private funding, Axios has learned. It also plans to name Richard Branson as chairman.
Why it matters: The Los Angeles-based company was running very low on cash, threatening the employment of around 300 people.
Backstory: Founded in 2014 as Hyperloop One, the company's technology is based on plans for a high-speed, tube-based transportation system released by Elon Musk the prior year. This past summer it announced two successful tests, although they still only reached a fraction of the near-700 miles per hour it eventually hopes to achieve.
- In the summer of 2016, the company parted ways with one of its co-founders and a few other employees after a dispute led to a legal battle.
- A number of other startups, including Musk's Boring Company, also are working on hyperloop.
The company rebranded as Virgin Hyperloop One following a recent investment from Virgin Group, through which Richard Branson took a regular board seat. Branson's new agreement to become chairman was key to obtaining the financing, per a source. One of the co-chairs he replaces is Shervin Pishevar, who resigned from the board following sexual harassment allegations unrelated to the company.
The new money comes from two existing investors: Russia's Caspian Venture Capital and Dubai's DP World. Not only does the deal let Virgin Hyperloop One stay afloat, but it also helps the company maintain ties in two geographic regions — Russia and the middle East — where it would like to sign contracts in 2018.
Virgin Hyperloop One did not return requests for comment.