Cruise Automation, the self-driving division of General Motors, announced on Tuesday that it has secured a $1.15 billion investment, raising its post-money valuation to an eye-popping $19 billion.
The money was raised 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,” Cruise said in a statement.
It’s another enormous boost for GM’s Cruise. Last May, it announced a $2.25 billion investment from the SoftBank Vision Fund, a major venture investment effort that was started by the Japanese tech giant in 2016. Then, in October, GM said it would team up with Honda to design a purpose-built self-driving car. The Japanese automaker said it would devote $2 billion to the effort over 12 years, including a $750 million equity investment in Cruise.
GM bought Cruise in 2016 for $1 billion to jump-start its self-driving efforts. The company has said it plans to deploy its fully driverless cars, without steering wheel or pedals, for commercial ride-hailing use as early as 2019.
By committing to rolling out fully driverless cars in a shortened time frame, GM is seeking to outmaneuver rivals both old and new in the increasingly hyper-competitive race to build and deploy robot cars. Ford has said it will build an autonomous car without a steering wheel or pedals by 2021, while Waymo launched its first commercial ride-hailing service in Phoenix (albeit in a more scaled-back fashion than originally anticipated).
There was a flurry of partnerships and investments around self-driving cars in 2016 and 2017, but that activity has since mostly died down, leading some critics to claim that the technology now finds itself in the “trough of disillusionment.”
To be sure, there are still huge sums of money exchanging hands despite this lull. There was the Cruise-SoftBank deal in May and the Cruise-Honda deal in October. In August, Toyota and Uber said they would join forces to build self-driving cars in a deal that involved the Japanese automaker committing $500 million to the ride-hailing giant. In April 2019, Uber secured another $1 billion from SoftBank, Toyota, and Denso.
There may be disillusionment in this trough, but there are huge piles of money, too.