Autonomous car company Cruise announced Tuesday that it has secured a $1.15 billion equity investment from a group of investors including its parent company, GM, as well as T. Rowe Price, Honda and SoftBank’s Vision Fund. The deal brings Cruise’s valuation to $19 billion.
The Bay Area business plans to launch a commercial robotaxi service by the end of this year, and to hit that milestone, it is looking to double in size by hiring about 1,000 employees during the year, according to Reuters. “Developing and deploying self-driving vehicles at massive scale is the engineering challenge of our generation,” Cruise CEO Dan Ammann said in a statement.
The company revealed that it has secured capital commitments of $7.25 billion in the past year. That includes $2.25 billion from SoftBank’s Vision Fund last year, with the fund planning to contribute $900 million in the first tranche and another $1.35 billion when Cruise’s autonomous vehicles are ready for commercial use. Honda also contributed, announcing a $2.75 billion investment in October. The Japanese automaker planned to make a direct equity investment of $750 million at the time and the remaining $2 billion coming over 12 years.
There was an explosion in corporate VC activity overall in 2018, and the trend continues this year. During 1Q, “autonomous driving companies raised $2.3 billion in deals including CVC investors with technology parent companies, such as Amazon and Intel Capital, as well as CVCs with automotive parent companies, such as Toyota AI Ventures and BMW i Ventures,” according to the latest PitchBook-NVCA Venture Monitor report. The autonomous-driving industry is expected to attract CVC investment in coming quarters due to high demand from automotive original equipment manufacturers for technology partnerships and additional investment opportunities in self-driving businesses.
Last year saw record-breaking traditional and corporate VC investments in companies developing autonomous cars in the US, as the total capital investment peaked at $3.8 billion across 68 deals. The second quarter of 2019 is well underway and autonomous businesses have secured $1.8 billion across 13 deals in the US.