Cruise just closed another funding round, raising $2 billion from GM & Microsoft in a deal that also includes tech help from the Seattle software giant. GM stock jumped as the news broke on Monday January 19.
General Motors Co. and Microsoft Corp. are leading a $2 billion investment round in self-driving car startup Cruise LLC in a deal that will bring the software giant’s cloud and edge-computing capabilities to the venture. Shares of GM surged on the news.
The additional funds will raise Cruise’s post-investment valuation to an estimated $30 billion, up from $19 billion when T. Rowe Price Associates Inc. invested in the company in 2019, Cruise said in a statement Tuesday. Cruise partner Honda Motor Co. and other institutional investors are also participating in the new round.Bloomberg
Wow, who would have thought capital markets would be this hot in the middle of a pandemic? Despite still having no products or services launched to the public, Cruise’s valuation jumped more than 50% because… why not?
Cruise will use Azure to manage its self-driving vehicle network by handling data and mapping. It will also enable driverless cars to communicate with Cruise’s back office and customer-facing app for ride-hailing. This type of software infrastructure is a vital component for a planned commercial robotaxi service.Bloomberg
This strikes me as a mistake. Microsoft no doubt gave them a sweetheart deal on the expensive cloud computing resources needed to manage a large fleet, but cloud offerings from Amazon and Google are widely regarded as better and more capable than Azure. I could be wrong though, maybe Azure has improved. It’s certainly a huge business for Microsoft.
Deal with Honda
As part of the deal to have Honda join this funding round and inject cash into Cruise, Cruise promised to help Honda launch an autonomous vehicle service in Japan:
Honda is leveraging a tie-up with General Motors and Cruise to ramp up its new mobility business by importing some of Cruise’s newest wheels for use in Japan this year.
Under the plan announced Wednesday, Honda Motor Co. will receive the first self-driving test vehicle from Cruise for assessment in Japan this year. After that, Honda plans to also start a mobility-as-a-service, or MaaS, enterprise in Japan using the Cruise Origin autonomous shuttle.Auto News
So Cruise will ship one of their test cars over to Japan in preparation for Honda launching a Robotaxi service using their Cruise Origin shuttle. This strikes me as a big promise to make to close a funding round, but maybe Honda can navigate the Japanese market better than Cruise can. The key takeaway here is that Honda has absolutely nothing when it comes to autonomy, and is starting to get worried –– hence the investment in Cruise.
Honda spokeswoman Yu Kitagawa said the Japanese carmaker is still discussing details and that it is too early to say how many vehicles will be used or when the programs begin.
The move is an outgrowth of Honda’s agreement in 2018 with GM and Cruise to develop and commercialize autonomous new mobility services. Honda Mobility Solutions Co., or HMS, is a subsidiary set up in February 2020 that will operate the new MaaS business.
At the time, Honda said HMS would pioneers new businesses by combining mobility services with “automated driving technologies, robotics and energy technologies.”Auto News
Right, good luck with that.
Read about the funding round on Bloomberg