Microsoft invested in Cruise, GM’s self-driving car unit, in a $ 2 billion financing round that gives the autonomous vehicle a $ 30 billion valuation.
Cruise, which General Motors bought for “more than a billion dollars” in 2016, when it had only 40 employees, now has nearly 2,000 employees and accounts for more than 40 percent of GM’s market value of $ 71.5 billion.
Her recent investment round puts her face to face with Waymo, Google’s sister company, as the world’s most valuable startup for autonomous driving. Waymo raised $ 3.2 billion last year in an undisclosed valuation. Two people told the Financial Times “more than $ 30 billion.”
The Cruise investment is Microsoft’s first major foray into self-driving cars, although the software company has a “connected car” company that provides “digital architecture” and cloud services to the likes of Volkswagen, BMW and Ford.
Microsoft CEO Satya Nadella said both Cruz and GM will use Microsoft Azure’s cloud computing platform “to help them expand and make autonomous transport mainstream.”
General Motors CEO Mary Barra said America’s largest automaker “will reap more benefits from cloud computing as we launch 30 new electric cars globally by 2025 and create new businesses and services to drive growth.” In early trading, shares of General Motors rose more than 9.5 percent on the news.
Current investors General Motors and Honda also contributed to the latest round, but no specifics were revealed. SoftBank Vision Fund is another investor in Cruise, as it invested $ 2.25 billion in 2018, with a valuation of $ 11.5 billion, and increased its investment in 2019 when the company was valued at $ 19 billion.
“A year full of bad things”
The most recent fundraising came after the difficult year 2020, when Covid-19 Stop testing autonomous vehicles. Cruise was able to resume testing in San Francisco by becoming a “primary service” that provides food delivery with a backup driver.
“It allowed us to stay on the road … while we made tremendous progress in simulation, off-road testing and development,” Cruz CEO Dan Ammann told the Financial Times late last year. “Against the backdrop of a year full of bad things, we were positively surprised by the ability to keep working and staying productive.”
One year ago, Cruz unveiled its flagship horse-riding vehicle, the Origin, an all-electric vehicle that resembles a lounge on wheels without a steering wheel or pedals.
The bulk of its testing is done by a fleet of modified Chevy bolts with a spare driver, although late last year it received clearance to remove driver safety completely.
When these cars will actually be deployed to passengers is uncertain. Cruz originally hoped to launch a driverless car rental service in San Francisco in 2019, but plans have been put on hold indefinitely.
In a sign of business progress, the company signed a deal in November to provide Walmart customers with free delivery in the Scottsdale, Arizona area, though the backup driver would still be at the wheel.
In contrast to the high valuations of Cruise and Waymo, Amazon bought self-driving rival startup Zoox last year for $ 1.3 billion, which some analysts believe has similar technology to Cruise but has smaller employee numbers.