Former chairman Shervin Pishevar has been accused of sexual misconduct and has exited his various businesses in recent days.
SAN FRANCISCO — Billionaire entrepreneur Richard Branson took control of Virgin Hyperloop One two weeks after its cofounder Shervin Pishevar exited under a cloud of sexual harassment allegations.
The company, which is among a few enterprises developing a high-speed transportation alternative to trains, also announced Monday that it had raised $50 million ahead of a planned Series C funding round from Cyprus-based Caspian Venture Capital and Dubai-based DP World.
That brings Virgin Hyperloop One’s total capital raising to $295 million since its founding in 2014 by Pishevar and then CTO, Brogan BamBrogan, who now runs rival hyperloop company Arrivo. The two parted company over a suit and countersuit that were later settled.
Virgin Hyperloop One officially welcomed Branson’s company as a key partner in mid-October. The partnership seemed like a logical fit given the Virgin Group founder’s reputation for transportation exploits, including high-altitude ballooning, high-speed yachting. He is also selling tickets to space tourists through his company Virgin Galactic.
Last week Pishevar resigned from his venture firm Sherpa Capital, which he co-founded. Branson’s move to become Virgin Hyperloop One chairman, replacing Pishevar, was essential to the company to obtaining the new financing, according to Axios, which first reported on the management change.
Earlier this month Pishevar took a leave from his role as executive chairman of Hyperloop One and other business positions after he was accused of making inappropriate advances to six women in a Bloomberg report on November 30. A seventh woman, tech author and entrepreneur Laura Fitton, later announced that she also had been sexually harassed by the investor in 2011.
Pishevar has denied all charges of sexual misconduct and said he was resigning to focus on a lawsuit he has filed against Definers Public Affairs, a research firm he has accused of orchestrating a smear campaign against him. Definers recently filed a motion to have the suit thrown out, contending that its files show no evidence to any work related to the investor.
Hyperloop One was one of a handful of investments whose potential to upend major sectors had earned Pishevar a place as one of Silicon Valley’s influential investors. He was also an early investor in Uber and Airbnb.
The technology, whose name and concept was dreamed up by Tesla CEO Elon Musk, involves magnetically levitated pods that scoot along at high speeds inside pressurized tubes that in theory could be placed above or below ground.
In a statement, Branson said the new investment will allow it to pursue opportunities in key markets in the Middle East, Europe and Russia.
Besides potentially reaching tremendous speeds — early hyperloop talk suggested that pods could eventually hit 700 mph, making the trip from Los Angeles to San Francisco in just 30 minutes — a hyperloop system would eliminate the possibility of fatal derailments, such as the one suffered by a high-speed Amtrak train Monday during its inaugural run from Portland to Seattle.
Virgin Hyperloop One officials also announced Monday that on December 15 engineers had pushed a pod to a record speed of 240 mph at the company’s test facility east of Las Vegas.
Pishevar has not said what his steps will be, beyond putting his time and energy into the lawsuit.
More than 100 men in a range of professions have faced charges of sexual harassment since The New York Times’ report on Hollywood producer Harvey Weinstein first appeared in early October.
In November, Branson was accused of sexual harassment by Antonia Jenae. The singer said she attended a party in 2010 at Branson’s Caribbean retreat on Necker Island when the host suddenly placed his head between her breasts and made a motorboat engine sound.
A Branson spokesperson responded to that allegation by saying that neither the Virgin Group boss nor his family had any recollection of the incident.
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