Hyperloop CEO Dirk Ahlborn announces a 5-mile test track starting Q2 2016 near Kings County, with a $150 million budget and backing from venture capital and industry partners. After proving the concept in the U.S., the company plans to expand to Asia, the Middle East, and Africa, targeting break-even within eight years on the LA-SF route.
Chapters
So the next steps. When is this actually going to happen? When are we going to see the Hyperloop? Well, we're starting construction next year, as you heard earlier, in Quay Valley. Quay Valley is right next to the I-5 in Kings County, which is like an hour north of Bakersfield, an hour south of Fresno. So if you drive down the I-5 freeway to Los Angeles next year, you'll see our Construction on the site. It's going to be a straight line around 5 miles long, right next to the freeway. So we choose this. Why did we choose this? We actually had several opportunities. We had several areas where we could have built the first one. But we want to go at the end from LA to San Francisco, right, one day. So this is a historical place for us. So being able to really be there right in the middle, that's why we choose it. Plus, obviously, we can be there within 2.5 hours from LA, which really helps. In terms of next steps, we're now basically closing a fundraising round with strategic partners and venture capital firms. So money as stupid as it sounds, is really not a big issue here. As you can imagine, like, Quer Valley is going to cost us $150 million. We have 20, around 20 city pairs right now that would like to have a first full-scale Hyperloop, and they will be paying for it. So some of them are in the US, some of them are in Europe, others are in Asia, the Middle East, Africa. It's, it's, it's like you're there when the railroad starts, right? So $150 million, if you guys read TechCrunch, is literally nothing. We have several partners that would like to fund us already 3, 4 times, but for us, the most important part is to create value for our team members and and be able to get the best partners in. People that actually, you know how they always say smart money? So we want people that, I mean, venture capital firms have to have a certain background, right? If it's something that we don't have, when we talk about, for example, they have connections in big data because big data is obviously a big, a big thing here. Other strategic partners might have experience with moving a lot of people. All right, so operational companies, or they're very well tied in with the governments in, in certain countries. So that's really what we're looking for. Then we're planning on doing a public offering, and the reason for the public offering is not like, oh, you know, it's an IPO, everything, it's an exit. It's really that this is a new kind of company. It's a company that's built on the community. So when we started out, nobody thought this was possible. It was just a handful of people, a community that came together and said, no, it's doable. I made the math. It's not a problem. And they started building this. And while we are moving forward more and more, obviously more and more people are jumping on. But it's really— if it's there where it is today, it's thanks to the community. Unfortunately, due to the laws that we have in the US, it's not possible for us to just say, hey, Why don't you guys put in your $20, right? So we need to do a public offering. We need to do a filing in order to allow them to allow anybody to, you know, be part of this. If not, it's just going to be these strategic partners, these venture capital firms that buy in now and are going to have a big exit. Just to give you guys an example, you were probably not there, but I was there when Facebook came out, right? So, and I was one of the first probably in the communities right after they came out of the universities and If I would have invested $20 during their Series A, those $20 right now would be worth more than $600,000. That's at the end, you know, it's a community, it's a user base that makes the products great, right? So what we really want is that they have a possibility to be part of that. So then we start construction in the second quarter 2016. Elon has committed to build a test track, a 1-mile small-scale test track that's going to be used for open-source student competitions, which is great. It's basically down our alley. I think there's a lot of technologies that might come out that we can be using, especially in communications. We're then going to be doing the testing optimizing Quay in 2017. In 2018, 2019, you're all invited to come by at the opening. So the lessons learned, I would say, from all this are, well, first of all, build a movement, because that's what we're doing, and it works great. Anybody who talks about this project, when you talk about it doing it in the US, It would take 20, 30 years. So obviously, and that's what people tell us, and you know what I answer them? We don't have to build it in the US. We will now because we're on private property, but the next step for us is very likely Asia, Middle East, where there's 50 million people living in a city and they need to get to be, to be moved. Africa, where they have huge infrastructure problems, they need to invest in infrastructure. And remember, infrastructure is an ongoing cost. It's a liability. And So if you can offer them something that actually makes money, and we are profitable after 8 years on LA to San Francisco with a lower ticket price, they're all over it. Because it's not the amount of money, it's not if you spend $16, $40, $50 billion, it's how fast do I get it back and is it continuously costing me something? Okay, and right now that's exactly the problem. That's why transit and transportation sucks. I mean, traveling sucks, right? Who really likes traveling? It used to be that it's an experience, but it's not anymore. So we are committed to make it suck less, basically. That's our goal. And we're not thinking to do this alone. So we need you guys, right? We need really bright minds that are working on huge problems to help us. And, you know, we want to help all the different companies that are working in these areas to basically get together and solve all those issues we're having with transportation. Because again, San Francisco, LA, yeah, it kind of sucks. But if you have been ever in Beijing, that's really bad. And so they don't have time. If you have a solution, they'll implement it tomorrow. India. You know, they're ready. They're building satellite cities. Imagine living in a great, like 100 miles away in a great city that's newly built with a front yard, and within 10 minutes you're in San Francisco. Because that's the solution we are building.
