General Motors Buying Driverless Car Technology For $1 Billion
General Motors Buying Driverless Car Technology For $1 Billion by Kyle Stanford, PitchBook
Taking its next step toward the future of cars, General Motors (GM) has announced that it’s acquiring autonomous vehicle startup Cruise Automation for a reported $1 billion in a deal expected to close in 2Q. Once the deal is completed, Cruise will operate as an independent unit within General Motors recently formed Autonomous Vehicle Development team and will continue to be based in San Francisco. Since the beginning of the year, General Motors has revved up its investment in the autonomous market, establishing the new unit and adding $500 million to Lyft’s recent funding in order to collaborate on the technology.
The $1 billion deal is quite an exit for Cruise, which has raised less than $19 million in total venture capital, according to the PitchBook Platform. The Y Combinator graduate (this will be the accelerator’s largest exit, surpassing the $970 million acquisition of Twitch) raised $12.5 million in Series A funding just six months ago at a valuation of $89 million. Along with YC, Spark Capital also invested in Cruise. If the acquisition closes at the $1 billion price tag, the exit would make Cruise the fifth company Spark has seen through to a unicorn exit, the others being Twitter, Wayfair, Oculus and Tumblr.
Self-driving car technology has been a hot topic recently. More and more companies are in the midst of developing their own technologies and major companies such as Apple, Uber, Google, Tesla, Audi and Mercedes-Benz have built special divisions and begun to invest in R&D on fully automated cars or automated features within their vehicles.
Driverless cars aren’t expected to hit the streets for consumer purchase for quite some time, however, with estimates pushing that date out to around five years or more. Also, Uber CEO Travis Kalanick has stated that the ridesharing service could be driverless in the future, though not until around 2030. With many major car manufacturers and several well-funded companies vying for a piece of the market that is still a ways off, the exit possibilities for early-stage companies in the space should continue to prove very lucrative.
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