GM’s management of Cruise remains one of the most underreported stories in autonomous driving. It’s not a flashy story — basically, it amounts to, “how did GM not screw this up?” — but it’s kind of amazing.
All the more so in light of today’s news that SoftBank is investing $2.25 BB for 19.6% of Cruise.
For those of us keeping score at home, GM purchased Cruise just over two years ago for between $500 MM and $1 BB (the exact price varies depending on the source, but who’s counting?). Now, two years later, GM is selling a large minority stake in Cruise to SoftBank (one of the world’s premier late stage venture investors) for an implied valuation of $11.5 BB. That is a return on investment that would make even the best venture capitalists turn backflips.
At the time of the original GM acquisition, I would’ve bet that by today all the San Francisco engineers would’ve left and GM would be quietly folding away the remnants of the Cruise unit. That story has played out in Silicon Valley a million times, and there was every reason to believe that a giant Detroit industrial behemoth would never be able to nuture a tiny, cutting-edge San Francisco startup.
The continued success of Cruise — they have logged more autonomous miles than any other company except Waymo or Uber — is a testament to the management skill of the entire GM organization, especially GM President Dan Ammann, who has been the public face of the relationship.
I would love to read more reporting on how they pulled this off.