Hyperloop, the ambitious high-speed transportation project announced it raising $26 million in funding from Khosla Ventures as a part of a larger Series B round. Other investors in this round include Formation8 and Sherpa Capital.
Elon Musk’s Hyperloop technology project aims to transport passengers between major cities at record speed of 800 mph. The funding announcement was made at the Web Summit in Ireland by CEO Rob Lloyd who also said the company is sure to achieve its goal of reaching its $80 million in Series B round by the end of the year. Lloyd, the former president of Cisco Systems joined Hyperloop as CEO in September taking over Brogan BamBrogan who is now the company’s CTO.
The funding amount of $26 million is a kind of debt that comes in from convertible note financing. Convertible notes are nothing but the bonds that investors buy to help the company secure funds; at some time in the future when the bond reaches its maturity, they get the option to exchange in the bond and take stock in the company instead.
The fresh funds helps the company to move more closer to making high-speed travel real. The funds would give the compand “every pound of steel required to achieve our Kitty Hawk moment one year later.” Lloyd added, “We have ordered the steel so we need to fill in the purchase order with the ship to address pretty quickly.” However, the company still need lot more money to raise. The estimated amount to construct the full Hyperloop between San Francisco and Los Angeles which would run for 400 miles would cost whopping $8 billion.