The Need for Speed
To our Valued Investors:
Vacuum technology is by no means a new concept.
If this statement conjures in your mind a 1950s era magazine advertisement featuring an attractive housewife in a perfectly pressed ankle-length dress gleefully cleaning her living room carpet with a clunky old Hoover, we need to clarify. This is not an article about vacuum cleaner technology, but a look at how the behavior of objects inside a vacuum will revolutionize transportation. You have probably seen, on many occasions, great examples of vacuum tubes that move items from point A to point B. They are a fixture at bank drive-thru stations around the world. Not too long ago, vacuum tubes acted as the email system before email existed in workplaces in need of rapid delivery of interoffice memos. A clear plastic pod would whoosh through a pneumatic tube and, like magic, the document has changed hands.
Now picture a different kind of pod. Instead of a plastic container the size of a tennis ball can, it’s a steel vessel the size of a subway car. Instead of cash or notes about payroll policy changes, the contents of the pod are human beings. Instead of connecting Bob in Human Resources to Marge in accounting, the tubes span from Los Angeles to San Francisco. This should give you the most basic idea of how Virgin Hyperloop will operate. Founded by Shervin Pishevar, Josh Giegel, and SpaceX engineer Brogan BamBrogan in collaboration with Elon Musk as Hyperloop Technologies about seven years ago, the company changed its name to Hyperloop One in 2016. Then, following the announcement of a strategic partnership with Richard Branson’s Virgin Group in October 2017, the name Virgin Hyperloop One was established, later to be shortened to Virgin Hyperloop in a rebranding last June. Considering the players involved in bringing Virgin Hyperloop to life, one would be intensely challenged to suggest a better pedigree than that of Musk and Branson in the modern age of technology. Still, The Musk / Branson benefits go beyond attention-grabbing name recognition: With this level of street cred, Virgin Hyperloop can attract the “planetary masters of their art”, whether the “art” is computer engineering, aerospace and aerodynamic engineering, mechanical design, motor systems, or rocket technology. The ever-growing team of the best and the brightest puts this company in a remarkably advantageous position as it rapidly advances the science of propulsion.
The funny thing is, as Hyperloop creates the future in rail travel, they do so with technology that’s actually pretty old at its core. Vacuum technology as a means of moving people around has been discussed, at least, for more than one hundred years. The central principle was kicked around in the late nineteenth century. Back then, a British engineer by the name of Brunel spent time experimenting with using compressed air to propel carriages through enclosed conduits. Hyperloop’s best-in-class innovators are simply taking it all to a 21st Century level, with the objective of rendering most of today’s travel options obsolete by zipping sleek people-filled containers through magnetized underground and above-ground tunnels at speeds approaching 700 miles per hour. The tubes themselves are a low-pressure environment that promotes faster and smoother propulsion. To get the pods moving, Virgin Hyperloop has perfected the science of magnetic levitation, which uses a network of magnets and tracks that propels the pod at a velocity equivalent to that of a jetliner. This adds up to shuttling people and cargo around at air travel speeds with a much lower pollution level and drastically improved efficiency. The pods consume very little energy and they expend no direct carbon emissions. Zero emissions. Zilch. Nada. Regardless of one’s stance on the politically charged topic of climate change, it is safe to assume that every sane and reasonable adult is in favor of an advancement that dramatically reduces global pollution levels. The future that Virgin Hyperloop promises should attract the full-throated support of environmentalists, futurists, commuters, and travel enthusiasts alike.
Without the time-consuming encumbrances of pre-flight checks and maintenance, baggage claim, refueling, and stocking up on mediocre in-flight meal offerings, Virgin Hyperloop trips will run on a schedule that more closely resembles a big city’s mass transit system in its frequency. The independence from fuel costs and a lower personnel-to-passenger ratio will greatly boost the company’s bottom line. Admittedly, it will be years before we see a network of Hyperloop tubes spiderwebbed across any continent, but it’s important to remember that the airline industry didn’t just spring up overnight either. For that matter, even railroad networks, the highway infrastructure, and modern maritime shipping lanes took decades to mature. That said, Hyperloop as an everyday means of going from place to place is probably closer than you might imagine. About three months ago, at Virgin Hyperloop’s test site near Las Vegas, Director of Passenger Experience Sara Luchian and founding engineer Giegel became the first two people to ever ride in a hyperloop pod. According to Luchian, “Following those successful tests, Virgin Hyperloop is paving the way for the regulation and certification of hyperloop systems around the world. Working alongside federal, state, and local governments around the world, our aim is to achieve safety certification by 2025, with commercial operations – such as those depicted in this video – beginning in 2030.”
Virgin Hyperloop is not aiming for an elite ridership. They do not aspire to become a company known for exclusively relocating rich people. In fact, they have publicly stated that the production of a transportation system that is beyond the average person’s budget would amount to a failure of mission. For what they hope to be an average of a $20 ticket, passengers will be able to travel from Denver to Chicago or Las Vegas to Seattle in an hour and 45 minutes, from San Francisco to Dallas in two hours and 45 minutes, or from New York to Washington D.C. in less than a half an hour.
Virgin Hyperloop has raised about $460 million in eight funding rounds. The company’s valuation is estimated to be around $700 million to $1 billion.
Although sometimes a polarizing figure, Elon Musk has an astounding track record of developing world-changing technologies. This helps explain why Tesla stock (Nasdaq: TSLA) has climbed more than 860% in less than twelve months. A couple of years ago, Iron Edge VC was freely selling shares of Musk’s SpaceX at $200, but today that company is in extremely high demand with multiple inquiries made every day, but supply is increasingly rare even at prices recently exceeding $450 with a likelihood of continuing to climb. As always, we encourage you in the strongest possible terms to conduct your own thorough due diligence before committing to any investment decision, but at the same time we can point out that Virgin Hyperloop might be an overlooked (if indirect) ticket to the Musk party train.
Virgin Hyperloop is still in the early stages of what could be the future gold standard of transportation. Some regulatory, budgetary, and infrastructure hurdles remain between the present and full realization of Pishevar and Musk’s vision, but some of today’s best minds in engineering and logistics are actively on the job. Because Virgin Hyperloop is at a point in its growth that benefits from venture capital funding rather than public investment, its shares are not available for purchase on any traditional stock exchange. Your friends at Iron Edge VC can deliver your piece of the future, though, with a pre-IPO investment in Virgin Hyperloop. If you would like to learn more, or if you know of anybody else who would, do not hesitate to contact us by clicking “Get in Touch” below.
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As always, shares are available on a first come, first served basis.
Paul Maguire, Managing Partner
The Iron Edge Team