General Motors has purchased SoftBank Vision Fund 1’s stake in self-driving company Cruise for $2.1 billion.
By purchasing SoftBank’s stake in Cruise, General Motors now has an 80 per cent stake in the company. The car manufacturer has also revealed that it will invest an additional $1.35 billion in Cruise.
SoftBank initially paid $2.25 billion for an 11 per cent stake in Cruise in May 2018. Of this investment, the first $900 million was to come at once, followed by $1.35 billion once Cruise’s self-driving vehicles were ready for commercialization. SoftBank later invested a further $300 million in the company.
Read Also: Cruise Ready To Expand Self-Driving Fleet Beyond San Francisco
Importantly, when Cruise started offering rides to the public earlier this year without a safety driver, it triggered SoftBank’s $1.35 billion investment requirement but rather than following through with it, it opted to sell its stake to General Motors.
Bloomberg notes that GM’s decision to purchase SoftBank’s stake reverses a diversification plan that former Cruise chief executive Dan Ammann had been pursuing and one which could have led to an initial public offering for the company. Ammann was fired in December and both GM boss Mary Barra and Cruise founder Kyle Vogt have opposed an initial public offering.
“Why not just go public? It’s a major distraction, especially right now,” Vogt said after the deal. “Cruise just launched a driverless ride hail service in SF, and we want 100% of our energy focused on scaling up and delighting our customers.”
Other companies to own a stake in Cruise include Honda, Microsoft, Walmart, and T. Row Price Group. General Motors has set up a plan that allows Cruise employees to cash out their stakes in the company if they wish. Employees hold total equity in the company worth $4 billion and GM is expected to set aside $1 billion to $1.5 billion in 2022 for this employee fund.
