How to Invest in Hyperloop One: Your Ultimate Guide
Hyperloop One (changed name from Virgin Hyperloop in November 2022) is a company with good prospects for the future of high-speed travel. I'm going to explore what Hyperloop One is and discuss whether or not it's possible to invest in the company.
Hyperloop One is a privately held company, which means direct investment is not currently possible. However, if the company goes public via an IPO, or if you qualify as an accredited investor, you may have future opportunities to invest.
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What Is Hyperloop One?
Hyperloop One is a privately-held company founded in 2014 that is on a mission to create fast, effortless journeys that expand possibilities and eliminate barriers of distance and time.
Hyperloop One wants to revolutionize how goods are transported by making it incredibly fast and cost-effective. Imagine a capsule-like pod that travels through a large tube with very little air in it. An electric motor powers this pod to speed up and slow down, enabling it to move almost as swiftly as an airplane, with speeds of up to 760 miles per hour (around 1223 kilometers per hour).
The pod will literally float on a cushion of air and glide at this high speed. Plus, the ride is super smooth with hardly any turbulence. This means goods can get to their destinations more quickly and without any of the bumps or jolts you might associate with other forms of transport.
The entire system is designed to be autonomous, meaning it can run without a driver. It's also very quiet and efficient, taking goods directly from A to B without stops in between. As for where these tubes would be located, they could be built on raised columns or even tunneled underground, which avoids any potential safety issues like road crossings.
However in February 2022, the company pivoted its focus to freight transportation and abandoned plans for human travel. This change led to the company laying off more than half of its total workforce (over 100 employees).
Further Hyperloop One Layoffs
Some more people were also laid off in December 2022 as they continue their transition towards being a cargo company instead of a passenger transport company.
This is something to consider before looking further into investing in the company.
How to Invest in Private Companies like Hyperloop One
To invest in private companies like Hyperloop One, one usually requires “accredited investor” status. In the U.S., this means having a net worth exceeding $1 million (excluding the value of your primary residence) or an income exceeding $200,000 in each of the two most recent years (or $300,000 combined income if married) and a reasonable expectation of the same income level in the current year.
These regulations protect individuals from risking too much of their wealth on high-risk investments.
As an accredited investor, you may have an opportunity to invest in Hyperloop One, if the company allows it.
Can Individuals Invest in Large Private Companies?
However, it's important to know that large private companies do not often seek investment from individual accredited investors. The primary reason for this is that fundraising from many individuals can be a complex and time-consuming process, especially compared to raising funds from a few large sources such as venture capital firms or angel investment funds.
The fundraising process involves significant legal, financial, and logistical considerations. Therefore, dealing with fewer investors simplifies this process. Furthermore, venture capital firms and angel investors often provide more than just money. They can offer strategic advice, industry connections, and credibility, which can be beneficial for the company's growth.
A few large private investment funds offer opportunities for indirect investment in companies like Hyperloop One. By purchasing shares in these funds, your money gets pooled with other investors' to support various companies, not just Hyperloop One. It might not be direct investment, but it's a way to have a stake in their success.
You Must Have a Long-term Plan
Investments in private companies like Hyperloop One are also generally less liquid, meaning they cannot be sold until a “liquidity event,” such as a company sale or an IPO, happens. Therefore, patience and a long-term investment perspective are vital.
If you're still interested, you can learn more about becoming an accredited investor here.
Hyperloop One has raised a total of $368.4M in funding over 9 rounds. Their latest funding was raised on May 13, 2019 and the company has been funded by a total of 35 investors.
A major investor in Hyperloop One is DP World. They are a multinational logistics company based in Dubai, United Arab Emirates. They specialize in cargo logistics, port terminal operations, maritime services, and free trade zones.
They are a leading enabler of global trade and see the potential of sustainable hyperloop-enabled cargo systems.
Will Hyperloop One Ever Go Public?
It's hard to say whether or not Hyperloop One will ever go public, but they have provided some hints in their FAQs.
Hyperloop One has mentioned that they see enormous potential to attract investment from the private sector, and leveraging public investments. So an initial public offering is still conceivable.
Conclusion on How to Invest in Hyperloop One
While we may not be able to invest in Hyperloop One in public markets right now, we may see an IPO in the future.
Stay tuned for updates on Hyperloop One.