General Motors (GM) announced today that the SoftBank Vision Fund will invest $2.25 Bn in GM Cruise Holdings LLC (GM Cruise). This furhter supports General Motor’s plans to commercialize AV technology at large scale. GM will also invest $1.1 billion in GM Cruise upon closing of the transaction.
The GM and SoftBank Vision Fund investments are expected to provide the capital necessary to reach commercialization at scale beginning in 2019.
SoftBank investment comes around two years after GM acquired Cruise Automation.
The acquisition of Cruise was part of GM’s path towards its goal of redefining the future of personal mobility. Also in 2016, GM entered into a strategic alliance with ride-sharing company Lyft; formed Maven, its personal mobility brand for car-sharing fleets in many U.S. cities, and established a separate unit for autonomous vehicle development.
SoftBank, on their side adds its stake in GM’s Cruise to their participation in more than 12 startups operationg in differents fields of future transport. These startups include: Didi Chuxing; Ola Cabs; Grab; Yummy Express; Uber; Grofers; DoorDash; Naldo; and FlightCar.
Softbank investment in GM Cruise
SoftBank Vision Fund will carry out its investment in two tranches with the first one ($900 million). Once that Cruise AVs are ready for commercial deployment, the Vision Fund will complete the second tranche of $1.35Bn, subject to regulatory approval.
When both tranches of investment are completed, SoftBank Vision Fund will own a 19.6% equity stake in GM Cruise and GMwill enjoy an increased flexibility on capital allocation.
“Our Cruise and GM teams together have made tremendous progress over the last two years,” said GM Chairman and CEO Mary Barra.
“Teaming up with SoftBank adds an additional strong partner as we pursue our vision of zero crashes, zero emissions and zero congestion.”
“GM has made significant progress toward realizing the dream of completely automated driving to dramatically reduce fatalities, emissions and congestion,” said Michael Ronen, managing partner, SoftBank Investment Advisers. “The GM Cruise approach of a fully integrated hardware and software stack gives it a unique competitive advantage. We are very impressed by the advances made by the Cruise and GM teams, and are thrilled to help them lead a historic transformation of the automobile industry.”
“We’re excited to be joining forces with a tech leader who shares our belief that AV technology will change the world,” said GM President Dan Ammann. “We look forward to partnering with SoftBank as we work toward deploying this technology safely and in massive scale.”
Image over the headline.- Dan Ammann (President General Motors Company) along with Kyle Vogt (founder of Cruise Automation) other member of GM Cruise team. © General Motors.