GM Cruise raises $1.15B for self-driving cars

GM Cruise

An autonomous Chevrolet Bolt electric vehicle from GM Cruise.

Cruise, the San Francisco-based autonomous vehicle division of General Motors (GM), raised another $1.15 billion in funding, which increased Cruise’s valuation to $19 billion. The investors in the round include T. Rowe Price Associates, Honda, Softbank Vision Fund and GM.

Cruise says it has raised $7.25 billion in capital in the last year. In October 2018, Cruise announced it will receive $2 billion from Honda over the next 12 years. The first chunk of that investment was a $750 million equity investment that at the time gave Honda a 5.7% ownership stake in Cruise. As part of the deal, GM and Honda will collaborate on a purpose-built autonomous vehicle that can serve a “wide variety” of use cases and be manufactured at high volumes.

In May 2018, the Softbank Vision Fund announced it will invest $2.25 billion in Cruise. When the deal closed, Softbank invested $900 million. Once Cruise’s autonomous vehicles are ready for commercial deployment, Softbank will complete the second investment of $1.35 billion, the companies said at the time.

Another huge milestone along our journey. We’re delighted to add new investors, and further commitment from existing partners, who share our vision for a safer, all-electric future.

It’s a good time to be a Cruiser. Bring your passion & talent to us:

— Cruise (@Cruise) May 7, 2019

“Developing and deploying self-driving vehicles at massive scale is the engineering challenge of our generation,” Cruise CEO Dan Amman said in a statement announcing the newest funding. “Having deep resources to draw on as we pursue our mission is a critical competitive advantage.”

GM Cruise has stuck to its previously stated timeline to launch a commercial service “sometime in 2019.” And to hit that mark, Cruise is looking to double in size by hiring about 1,000 of the course of 2019, according to a recent report by Reuters. Cruise also announced in November plans to expand to Seattle. At the time, Cruise said there weren’t plans to test its autonomous vehicles in Seattle. The purpose of expanding in Seattle is to attract between 100-200 engineers by the end of 2019.

GM bought Cruise in 2016 for $1 billion to jump-start its self-driving efforts. Cruise’s main competition is Waymo, which last year had the best-performing autonomous vehicles in California with one disengagement every 11,017 miles, according to a report from the state’s Department of Motor Vehicles. Of course, Waymo has had quite the head start on Cruise, which had the second-best performing autonomous vehicles in California last year with one disengagement every 5,204.9 miles.

Cruise had 162 self-driving cars operating in California that drove a reported 447,621 miles. That was more than triple the mileage from 2017 for Cruise, which had 0.19 disengagements per 1,000 miles. That is also a significant improvement from Cruise’s 0.8 disengagements per 1,000 miles in 2017.

Cruise does most of its testing in San Francisco, which is offers a much tougher driving environment than the Silicon Valley suburbs that are the main test bed for Waymo’s vehicles. Kyle Vogt, Cruise’s co-founder, president, and chief technology officer said in 2017 that “every minute of testing in San Francisco is about as valuable as an hour of testing in the suburbs.”

In April 2019, Uber Technology Inc.’s Advanced Technologies Group raised $1 billion to develop self-driving cars. Investors in that round included Toyota Motor Corp., DENSO Corp., and the SoftBank Vision Fund. The investment is intended to help Uber ATG further develop self-driving hardware and software and to scale up for production.