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What led to Arrivo Shutdown? Here is the complete analysis!

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Have you ever heard of the Hyperloop- The fifth mode of transport? This idea was envisioned to travel at hypersonic speed. Arrivo was a startup company that worked on the same concept but couldn’t fulfill its dreams to achieve it. Although, they have pivoted their plans to be back in the business.

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Founder Details

Arrivo was founded by Brogan BamBrogan, Andrew Liu, David Pendergast, Jadon Smith, Knut Sauer, Nima Bahrami, and William Mulholland. Brogan BamBrogan was a former SpaceX engineer and also co-founder of Hyperloop One. It was based in Los Angeles, California. Arrivo got its name from “Arrival” as they envisioned building a Hyperloop that will shift transport.

Funding and Investor Details

Arrivo received its initial funding in 2017 but the company didn’t reveal how much capital they were able to secure. It is known that Arrivo has undergone 3 rounds of funding. They received $1 billion in July 2018 from Genetec America. The latest round of funding was the Convertible Note round where they received funding from Plug and Play.

Business Model

They wished to create a new mode of transport that would end the traffic. They envisioned accomplishing a transport system that has speed far beyond any metro system in the world. The key element was to commercialize Hyperloop- the vacuum tube. But in November 2017, the company shifted from the key element to the more standard Maglev model. This system didn’t involve tunnels or tubes which are elements of the hyperloop system.  The Maglev system requires 2 sets of magnets for repelling and pushing the train, something that closely resembles high-speed magnetic levitation technology.

Their plan involved building a maglev system in Colorado that would transport automobiles to and fro from Denver International Airport at 200 mph. They invested $10 million in the first phase of the development process in the Commerce City of Colorado. This was followed by the construction of a demonstration track and finally, the first link was formed from Aurora to the airport.

Futuristic Transport System that Arrivo dreamt.

Competitor Analysis

HyperloopTT:

Hyperloop Transportation Technologies envisioned by Elon Musk is an American-based research company. Their aim was to commercialize the Hyperloop concept and have raised $50 million in 4 rounds of funding.

TransPod:

TransPod works on designing ultra-high-speed transportation technology systems. The company worked on various travel designs similar to the tube guideway of Hyperloop. Their TransPod system contains propulsion and aerodynamics which reduces friction in automobiles.

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The Boring Company:

The Boring Company was founded by Elon Musk in 2016. They focused on building tunnels as known from its name to facilitate the underground transport system.

Failure Analysis

Arrivo was shut down on December 14, 2018. From the very start, the company had a tense work environment and a lack of guidance. They started with a plan for a Hyperloop transport system. The idea was very tempting for the cities struggling with congested highways. But we couldn’t see any result or proof of concept at any scale.

Then suddenly in 2018, they shifted to the Maglev system. But that plan never came into action. It was said that the first phase of work involved the construction of a test track, but the ground was never broken.

Further, it was known that they faced money troubles. The Virgo reported that the company was unable to secure Series A funding. Moreover, employees were dissatisfied as there were no guidelines or proper action plan to work on.

Possible Fixes

The company lacked planning before its start. They came up with a revolutionary idea that eventually didn’t work out. Then the company brought a new transport structure but didn’t work on it. To launch a startup you need a step-by-step working plan for ideas not to remain ideas only forever. There was a huge disharmony between the team and the founders. Moreover, they couldn’t receive much funding as they couldn’t prove to investors that their idea would work. Nothing could be worked out without revenue.

The ideas weren’t aggressively pursued by the founders themselves. They lost faith midway and didn’t believe it would be successful. There is no point in carrying on something if you lost interest midway as you don’t put in all your efforts. It’s a hard industry to work in, so it’s tough to generate real capital. At such times it’s good to involve investors to build trust.

Do Share Your Thoughts

Do tell us all your thoughts in the comments section below, we look forward to reading all the comments in the section below.

Also, don’t forget to download our Android app which contains startup case studies and business book insights, verified business concepts, and no bullshit!!

Related Articles:

What was Arrivo?

Arrivo was a startup that envisioned to travel at hypersonic speed but couldn’t fulfill its dreams to achieve it.

Who founded Arrivo?

Arrivo was founded by Brogan BamBrogan, Andrew Liu, David Pendergast, Jadon Smith, Knut Sauer, Nima Bahrami, and William Mulholland. Brogan BamBrogan was a former SpaceX engineer and also co-founder of Hyperloop One. It was based in Los Angeles, California.

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