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Driverless Chevy Bolts are a common sight on the streets of San Francisco, where Cruise is based.
Microsoft has invested in Cruise, General Motors’ driverless car unit, in a $ 2 billion funding round that gives the self-driving company a $ 30 billion valuation.
Cruise, which was bought by GM for “over a billion dollars” in 2016 when it had just 40 employees, now has nearly 2,000 employees and accounts for more than 40% of the market capitalization of 71 , $ 5 billion from GM.
Its latest round of investment puts it face to face with Waymo, Google’s sister company, as the world’s most valuable autonomous driving start-up. Waymo raised $ 3.2 billion last year with an undisclosed valuation that two people said at the FT was “over $ 30 billion.”
The investment in Cruise is Microsoft’s first major foray into driverless cars, although the software company has a “connected car” business that provides “digital chassis” and cloud services to Volkswagen, BMW and Ford.
Satya Nadella, chief executive of Microsoft, said Cruise and GM would use Microsoft’s Azure cloud computing platform “to help them scale and integrate autonomous transport.”
Mary Barra, GM of GM, said America’s largest auto company “would reap even more benefits from cloud computing by launching 30 new electric vehicles around the world by 2025 and creating new businesses and services to boost the growth”. Early in the session, GM shares rose more than 9.5% after the news broke.
Existing investors GM and Honda also contributed in the final round, but no specific breakdown was disclosed. SoftBank’s Vision Fund is another investor in Cruise, having invested $ 2.25 billion in 2018, valued at $ 11.5 billion and completing its investment in 2019 when the company was valued at $ 19 billion.
“A year full of bad things”
The latest fundraiser came after a difficult 2020, when COVID-19 halted driverless vehicle testing. Cruise was able to resume testing in San Francisco by becoming an “essential service” providing food delivery with an alternate driver.
“It kept us on the road … as we made spectacular progress in off-road simulation, testing and development,” Dan Ammann, CEO of Cruise, told FT at the end. from last year. “In the context of a year full of bad things, we were positively surprised by the ability to continue working, to maintain productivity.”
A year ago, Cruise unveiled its flagship vehicle, the Origin, an all-electric, salon-like vehicle on wheels with no steering wheels or pedals.
The bulk of its testing is carried out by a fleet of modified Chevy Bolts with a back-up driver, although at the end of last year he was given a license to remove the safety driver entirely.
It is uncertain when these cars could actually be deployed for passengers. Cruise had initially hoped to launch a driverless phone service in San Francisco in 2019, but plans have been postponed indefinitely.
As a sign of business progress, the company signed an agreement in November to offer Walmart customers contactless delivery in the Scottsdale, Ariz. Area, although a replacement driver will still be behind the wheel.
Unlike soaring Cruise and Waymo valuations, Amazon bought standalone rival startup Zoox last year for $ 1.3 billion, which some analysts believe has similar technology to Cruise but with a smaller workforce.
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