EMERGING TECH
EMERGING TECH
EMERGING TECH
GM’s Cruise self-driving car unit raises $1.15B more at $19B valuation
GM Cruise LLC, the General Motors Co. subsidiary developing self-driving cars, today divulged that it has raised another $1.15 million in funding to support its operations.
This latest investment, which comes in a week when ride-hailing giant Uber Technologies Inc. is set to go public, was led by Rowe Price Group Inc. with participation from all of Cruise’s existing backers. The group includes parent company GM, SoftBank Group Corp. and Honda Motor Co. Ltd. The Japanese automaker first became an investor in October when it struck a $2.5 billion partnership with Cruise to jointly develop self-driving cars.
Honda bought a $750 million equity stake as part of the deal that valued the unit at $14.6 billion. Today’s funding raises that number to $19 billion, a reflection of the massive potential auto industry players and investors see in self-driving vehicles.
Cruise has plans to launch a ride-hailing service with autonomous taxis by the end of the year. The unit has already been providing rides to employees in San Francisco and recently teamed with DoorDash Inc. on a project to harness its vehicles for food deliveries as well. In the long term, GM is looking to start mass production of an experimental car model first unveiled last year that has no steering wheel or pedals.
The automaker has been sinking a lot of capital into Cruise in a bid to gain an edge over the competition. According to Bloomberg, the subsidiary lost $728 million last year and is expected to burn through $1 billion during 2019.
The new investment will enable Cruise to continue pressing ahead it works to bring its ride-hailing platform online. The unit is playing catch up with Alphabet Inc.’s Waymo LLC, which last year started piloting a commercial autonomous taxi service in Arizona. Ford Motor Co. and BMW parent company Daimler AG plan to launch competing services as well.
“Developing and deploying self-driving vehicles at massive scale is the engineering challenge of our generation,” Cruise Chief Executive Dan Ammann said in a statement. “Having deep resources to draw on as we pursue our mission is a critical competitive advantage.”
Photo: Cruise
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