GM Cruise has managed to raise a whopping figure of $1.15 billion from the likes of SoftBank, Honda and GM, which is the parent company of GM Cruise. This outs the new valuation figure for GM Cruise at $19 billion. This recent round of investments come as a new equity investment from these companies. SoftBank has utilized its Vision Fund to participate in this equity investment round. GM Cruise is a self-driving vehicle company that is currently involved in a major push to launch a new kind of ride-hailing service that will use a fleet of autonomous vehicles to ferry passengers from one place to another.
This recent investment into GM Cruise’s operation mean that the company can allocate more resources towards achieving its goal. The startup company has already secured investment commitments that are more than $7 billion, and it did all of that just in the year of 2018.
Dan Ammann, who is the CEO of GM Cruise, has stated about this recent investment that there lies a huge challenge to develop as well as deploy this technology on a large scale, and overcoming this would take a giant engineering leap that the company is ready to take. The more investments keeps flowing into this company, the better its chances at realizing its vision and gaining a competitive advantage over its competition.
GM Cruise has declared an aggressive timeline to deploy its fleet of self-driving cars, and the company intends to start commercial service within the end of this year. The company is competing with Tesla, the giant electric car manufacturer that has also announced its ambitions to deploy a fleet of robot taxis in America by 2020.
GM Cruise has managed to grow rapidly over the past couple of years. The company has a humble beginning, as it started as a small startup operation that only had 40 employees under its wing at that moment. GM Cruise currently employs more than 1,000 people today who are based at its headquarters in the city of San Francisco. The company is now trying to accelerate its rate of growth and compete with other industry giants for market share.
GM Cruise announced in November of 2018 that it plans to expand to cities such as Seattle so that it can hire more talented engineers and scale up its technology. The company aims to hire around 200 new engineers for its operation by the end of this year. GM Cruise is led by Ammann, who left his previous post as president of the GM Corporation to take on this new job, and he is planning to hire an additional 1,000 engineers and other personnel by the time 2019 comes to an end.
GM Cruise is a subsidiary of GM, the US car maker giant, and the company is currently expanding its office space in its San Francisco headquarters in order to accommodate more employees and facilitate this robust growth. They will soon take over the office space at Dropbox headquarters by the end of 2019, and this will help GM Cruise to practically triple its current office space in the city of San Francisco.
SoftBank made an investment of $2.25 billion into GM Cruise via its Vision Fund in the month of May in 2018. This massive investment was cut into two portions, and the first portion of $900 million was put into the company at the closing of the transaction. Once GM Cruise is ready to deploy its fleet of autonomous vehicles, SoftBank will then complete the second portion of that investment which is valued at $1.35 billion.
Honda also committed towards an investment of $2.75 billion into GM Cruise just a few months after the SoftBank deal was finalized. This exclusive deal with GM Cruise will allow Honda to have autonomous vehicles that will be developed under the company. Honda agreed to invest $2 billion into the operations of GM Cruise and this investment will be made in chunks throughout the next 12 years. Honda also agreed to invest $750 into Cruise’s operation at the time when the deal was closed, which gave Honda a stake of 5.7% into the company.