GM's Cruise autonomous vehicle department gets a US$1.15 billion investment

GM's Cruise autonomous vehicle department gets a US$1.15 billion investment

In a statement, Cruise said that the funding round is coming from a "group comprising institutional investors, including funds and accounts advised by T. Rowe Price Associates, Inc., and existing partners General Motors, SoftBank Vision Fund and Honda".

In its announcement, Cruise said it raised $7.25 billion in new capital last year, including $2.25 billion from Softbank and $750 million from Honda, along with a promise of $2 billion more from Honda over a 12-year period.

Developing and deploying self-driving vehicles at massive scale is the engineering challenge of our generation.

Almost a year ago, Cruise garnered a 2.25 billion dollars investment from Japan's SoftBank. It comes in addition to $2.75 billion from Honda Motor Co. last October and $2.25 billion last May from Japanese tech firm investment firm SoftBank. The second tranche of $1.35 billion will be made once Cruise's autonomous vehicles are ready for commercial deployment, the companies said at the time.

Investment in Cruise now totals $7.25 billion. Ammann had worked closely with Cruise since GM acquired the self-driving vehicle start up back in 2016. At that point the company might have been worth just over $11 billion. The unit's chief executive officer, former GM President Dan Ammann, is incentivized to arrange such a deal as part of his compensation package.

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"Having deep resources to draw on as we pursue our mission is a critical competitive advantage".

Cruise is considered among the leaders in the race to deploy autonomous vehicles without human backup drivers. Waymo, one of Alphabet Inc.'s (NASDAQ: GOOGL) moonshots, was rumored in March to be willing to sell as much as 20% of the self-driving vehicle company at a valuation "at least several times" higher than Cruise's then-$15 billion valuation.

The expense comes as technology businesses and automakers seek aid to cover the capital expense of creating autonomous vehicles for obtaining a return on their 31, using an date. Cruise spent about $200 million last quarter.

General Motors Co.'s autonomous vehicle unit is taking on new investors and gaining value as it works toward launching a self-driving taxi service by the end of the year.

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