Vacuum tube transportation company Hyperloop Technologies Inc. has raised $26 million of its $80 million Series B round.
The startup expects to close the rest of the financing by the end of the year, said Chief Executive Rob Lloyd in a blog post. The round was led by Khosla Ventures with participation from Formation8 and Sherpa Capital, as well as all former Series A investors.
The $26 million round was raised by selling convertible notes, a form of debt. Investors in the notes will be able to receive interest from the financial instrument or can convert the note into stock after a certain amount of time.
Hyperloop will also have three demonstration tracks close to completion by 2020, said Lloyd at Web Summit in Dublin today. The company is in the process of purchasing enough steel to start construction on the projects soon, he added.
Hyperloop transportation was popularized by SpaceX founder and Chief Executive Elon Musk in a 2013 white paper. It is a vacuum tube transportation system some believe could whisk passengers along great distances at speeds far faster than airliners or bullet trains.
Traveling within a hyperloop pod from San Francisco to Los Angeles, for example, would only take 30 minutes. However, building such a hyperloop track is projected to cost more than $8 billion.
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