GM Cruise, the self-driving vehicle company, has managed to raise $1.15 billion in new equity from a group of investors the likes of which include T.Rowe Price Associates, SoftBank, Vision Fund, Honda and it’s parent company GM. The company is pushing to launch a fully functional ride-hailing service this year.
The investment increases GM Cruise’s post-money valuation to $19 billion. This valuation includes SoftBank’s previous investment from last year. According to the company they’ve managed to gain $7.25 billion in capital investments in the past year alone.
“Developing and deploying self-driving vehicles at massive scale is the engineering challenge of our generation,” Cruise CEO Dan Ammann said. “Having deep resources to draw on as we pursue our mission is a critical competitive advantage.”
GM Cruise has the tightest timeline among other companies wanting to achieve the same goal. They haven’t ever tampered with their stated timeline which said they would launch a self-driving commercial service “sometime in 2019” which is great.
Back in 2013, when Cruise was founded, it was this small startup with around 40 employees whilst today they have more than 1,000 employees and counting at their San Francisco headquarters and they still have plans for further growth.
In November Cruise announced their plans to expand to Seattle in hope of recruiting more engineering talent to develop their technologies. Ammann, who left his position at GM to take this role on, plans to hire at least 1,000 more engineers and other personnel by the end of the year so this year is a big one for Cruise.
Karl Vogt, who was a co-founder and CEO of Cruise and who is now President and CTO of the company, and Arden Hoffman, who helped scale Dropbox and who left the file-sharing storage company so he can help Cruise scale quickly and head up human resources, are some of the valuable additions to Cruise’s staff who will make a significant difference to the company’s success.
In May 2018 GM Cruise received a $2.25 billion investment by SoftBank’s vision fund. This investment was split into two stages as part of an agreement between the two companies. SoftBank gave $900 million upfront at the closing of the transaction and said that once Cruise’s autonomous vehicles are ready for commercial deployment they’ll get the rest of the investment which would be $1.35 billion.
A few months later, Honda did their bit with a $2.75 billion investment which was apart of an exclusive agreement with GM and Cruise to develop a new kind of autonomous vehicle.
At the time Honda made an immediate and direct equity investment of $750 million in Cruise and agreed to invest the remainder, $2 billion, over the next 12 years. Honda’s investment gives them a 5.7% stake in Cruise.