Landmark day for autonomous vehicles
Cruise: SoftBank, GM steering $3.35 billion to S.F. tech firm
Boosting plans to deploy self-driving cars next year, the SoftBank Vision Fund will invest $2.25 billion in General Motors’ Cruise unit, and General Motors will invest $1.1 billion, the companies said Thursday at a news conference in Detroit.
GM, which bought San Francisco’s Cruise two years ago, has already said it expects to put autonomous vehicles on the road in 2019. But the huge capital commitment from the car company and the year-old, $100 billion fund backed by Japan’s SoftBank Group, Apple and Saudi Arabia’s Public Investment Fund, among others, increases the likelihood that the deployment will happen on time and at a massive scale.
“We were blown away by the ability of the Cruise team to iterate quickly, both for hardware and software (and) the ability of GM once this is ready
to put production to work,” said Michael Ronen, managing partner of SoftBank Investment Advisors, which manages the fund.
SoftBank will get a 19.6 percent stake in the newly formed GM Cruise Holdings LLC. The investment values the business at $11.5 billion — a huge premium to what GM paid, which was between $500 million and a billion, depending on incentives.
That lofty valuation, and future upside, will be a potent recruiting tool, said Kyle Vogt, Cruise CEO and co-founder.
“That’s just the tip of the iceberg of what the company’s value could be,” he said. “Equity is a really attractive element of working at Cruise and will really help us in the war to acquire the best talent in the space.”
Cruise now has 740 full-time employees in San Francico and has increased its employee count by 40 percent a quarter, a pace Vogt expects to continue.
“Developing this technology is one of the most challenging problems of our generation,” he said. “The complexity requires a very large number of people.”
Cruise recently moved into new headquarters at 1201 Bryant St., from which its dozens of self-driving Chevy Bolts head out around the clock for tests on city streets with backup drivers.
GM continues to see ridehailing as the obvious first use for robot cars, GM President Dan Ammann said.
“Beyond that, we see opportunities to move goods, package delivery and other use cases.”
While Ammann ducked questions about where the robot taxis would launch, he said the fleets will be able to grow rapidly.
“GM knows how to do largescale industrial production,” he said.
SoftBank will invest $900 million initially and $1.35 billion when Cruise’s autonomous cars are ready for deployment. GM’s $1.1 billion infusion will come as soon as the deal closes.
Scores of companies, including virtually every automaker, are racing to get robot cars ready for commercial use.
Both GM and SoftBank have a web of investments related to self-driving cars, notably major stakes in Lyft by GM and in Uber by SoftBank.
GM has been quiet about its Lyft relationship, although its $500 million stake makes it a major investor. Ammann said GM does not have any active projects with Lyft.
“This whole space has a lot of relationships,” he said. “All our energy now is focused on getting this technology ready for full driverless commercial deployment.”
Underscoring that point, on Wednesday, Uber CEO Dara Khosrowshahi said at the Code conference in Los Angeles that his company was talking to Waymo, the driverless unit of Google parent Alphabet, about allowing Waymo self-driving vehicles to be hailed on the Uber app.