Driverless Chevy Bolts are common on the streets of San Francisco, where Cruise is located.
Microsoft invested in Cruise, General Motors’ driverless car unit, in a $ 2 billion financing round that gives the self-driving company a $ 30 billion valuation.
Cruise, which was purchased by GM for “more than $ 1 billion” in 2016, when it had just 40 employees, now has almost 2,000 employees and accounts for more than 40 percent of the $ 71.5 billion market capitalization from GM.
His latest round of investment puts him face to face with Waymo, Google’s sister company, as the most valuable self-directed startup in the world. Waymo raised $ 3.2 billion last year in an undisclosed assessment that two people told FT to be “more than $ 30 billion”.
The Cruise investment is Microsoft’s first major foray into driverless cars, although the software company has a “connected cars” business that provides “digital chassis” and cloud services to companies like Volkswagen, BMW and Ford.
Satya Nadella, chief executive of Microsoft, said that both Cruise and GM would use Microsoft’s Azure cloud computing platform “to help them scale and make autonomous transportation popular.”
Mary Barra, GM’s chief executive, said that America’s largest automotive company “will reap even more benefits from cloud computing by launching 30 new electric vehicles globally by 2025 and creating new businesses and services to drive growth.” At the start of the trading day, GM shares rose more than 9.5 percent after the news.
Existing investors GM and Honda also contributed to the last round, but a specific analysis was not released. SoftBank’s Vision Fund is another investor in Cruise, having invested $ 2.25 billion in 2018, at a valuation of $ 11.5 billion and completing its investment in 2019, when the company was valued at $ 19 billion.
“A year full of bad things”
The last fundraiser came after a difficult 2020, when COVID-19 stopped testing driverless vehicles. Cruise was able to resume testing in San Francisco by becoming an “essential service”, providing food deliveries with a spare driver.
“This allowed us to stay on the road … while making dramatic progress in simulation and off-road testing and development,” Dan Ammann, Cruise’s CEO, told FT last year. “In a scenario of a year full of bad things, we were positively surprised by the ability to continue working and productivity.”
A year ago, Cruise unveiled its flagship vehicle, Origin, a fully electric vehicle that resembles a lounge on wheels, with no steering wheel or pedals.
Most of his testing is done by a fleet of Chevy Bolts modified with a backup driver, although at the end of last year he was given a license to remove the safety driver completely.
When these cars can actually be used for passengers is uncertain. Cruise originally hoped to launch a driverless greeting service in San Francisco in 2019, but plans have been postponed indefinitely.
In a sign of commercial progress, the company signed an agreement in November to provide Walmart customers with contactless delivery in the Scottsdale, Arizona area, although a backup driver is still behind the wheel.
In contrast to the growing ratings of Cruise and Waymo, Amazon bought rival startup Zoox last year for $ 1.3 billion, which some analysts believe has similar technology to Cruise, but a smaller staff.
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