General Motors looks to have put the final kibosh on any dreams of greater autonomy Cruise may have once had. Late on Friday, GM said it had bought SoftBank out of the robotaxi developer, acquiring its stake for…
$2.1 billion and, separately, pledging to honor the Japanese venture capital firm’s commitment to inject a further $1.35 billion into the company. Cruise confirmed separately that this ended the debate over whether it would seek an initial public offering.
“Upon the successful completion of the transactions, the company’s ownership position in Cruise will be approximately 80% (on a fully diluted basis), and SoftBank will no longer have an ownership interest in or have any rights with respect to Cruise,” GM said in a regulatory filing to the SEC.
The Vision Fund says goodbye
The Japanese company’s famed Vision Fund, behind such early investment bets as Jack Ma’s Alibaba, had initially invested $900 million in Cruise in 2018 and had been on the hook for a follow-on investment of $1.35 billion once the startup began operating fully driverless cars, a feat achieved in February.
At the time, GM said Cruise’s soft launch of a commercial service in San Francisco was a “major milestone” on its way toward demanding payment for rides and eventually generating $50 billion in annual revenue by the end of the decade.
The move to bind Cruise more closely to the Detroit carmaker follows the ouster in December of Dan Ammann, Cruise’s independently minded chief executive. Afterward, GM executives told CNBC the two now “totally align” in terms of strategy.
Ammann was believed to be focusing his efforts on an IPO, rebuffing GM CEO Mary Barra’s desire to see the company aid her plans for rolling out more advanced automated features like Ultra Cruise expected to debut in 2023 in its upcoming Cadillac Celestiq.
As if to underscore that point, Cruise indicated separately on Friday it was issuing to employees a new form of equity that could offer “potential upside for employees but without all the distractions of being a public company.”
In a statement posted to its website, cofounder and CEO Kyle Vogt said the new “Recurring Liquidity Opportunity,” or RLO for short, would level the playing field with publicly traded companies when it comes to recruiting the best and brightest engineers. This would obviate any need in the foreseeable future to list on the capital markets in order to better compete for top talent.
“Our cash position is strong, so an IPO is not a necessary or appropriate distraction at this time,“ Vogt said.
Tesla an outlier
Cruise is in a race with Alphabet’s Waymo, Intel’s Mobileye, Amazon’s Zoox, and Elon Musk’s Tesla to develop robotaxis in the West, as well as Pony.AI and Baidu in China.
While all are working to bring…
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