HyperloopTT, a startup inspired by Elon Musk’s vision of a high-speed transportation system, is facing a financial crisis that threatens its prototype project in Italy. The company, which aims to design a hyperloop prototype in Northern Italy, is running dangerously low on cash and is in need of an additional $5 million to cover operational expenses, pay back debt, and compensate employees who have been working without pay for months.
In a letter to shareholders obtained by Fortune, HyperloopTT CEO Andrés de León expressed the urgent need for funding to protect the value the company has created over the last decade. He highlighted the sacrifices made by C-Suite executives and employees who have reduced their salaries by 10-25% to keep the company afloat. De León revealed that HyperloopTT had until February 28 to repay $1 million borrowed from an investor, or risk forfeiting all of the company’s assets.
While it remains unclear whether HyperloopTT was able to meet this deadline, the company assured Fortune that it has the support of its shareholders and that its investor situation has been resolved. However, the financial challenges have prompted HyperloopTT to make changes, including leaving its R&D facility in Toulouse, France, and opening offices outside of Venice, Italy. The move is part of the company’s strategy for the development of its project in Italy.
HyperloopTT, along with other companies involved in the potential Italy project, signed a contract with an Italian regional highway operator in January. The contract provided €4 million for a feasibility study of a 10-kilometer prototype between Venice-Mestre and Padua in Northern Italy. HyperloopTT is set to receive approximately €1.6 million from this funding. However, completion of the study does not guarantee that the project will move forward.
HyperloopTT was one of the first companies to emerge after Musk published his whitepaper detailing the concept of a high-speed transportation system. While Musk aims to build a Hyperloop system with his own tunneling startup, the Boring Company, progress has been limited, with only 2.4 miles of operational tunnels completed. These tunnels are currently being used to transport people in Teslas underground, but safety issues have arisen during their construction.
The financial crisis facing HyperloopTT highlights the challenges of turning Musk’s visionary concept into a reality. As the company seeks additional funding to continue its prototype project in Italy, the future of the Hyperloop remains uncertain. However, with the support of its shareholders and a contract in place, there is still hope for HyperloopTT to overcome its financial hurdles and make progress towards revolutionizing transportation.
