Thanks to $2.75B from Honda for GM’s self-driving division, the Cruise continues

GM’s self-driving division, Cruise, received a $2.75B investment from Honda just a few months after pulling in $2.25B from Softbank.

October 4, 2018

Yesterday, Honda invested $2.75B in GM’s self-driving program, Cruise. Why are they getting in bed with a competitor?

As the race to build autonomous vehicles spreads out, slow-moving companies are hitching rides with industry leaders — and the tech companies behind it all are still on a roll.

If you can’t beat ’em, draft ’em

Two clear leaders have emerged in the crowded self-driving race: GM-Cruise and Google’s Waymo. But Ford bought an AI company called Argo in an attempt to catch up, and Mercedes, BMW, Toyota, and Volvo are all developing their own self-driving cars.

Meanwhile, some legacy automakers — Honda and Hyundai — have remained on the sidelines. Now, as the future of self-driving cars looks certain, the Japanese automaker seems to have finally gotten nervous. 

Honda will invest $750m in Cruise immediately, doling out the remaining $2B over 12 years as part of a 5.7% stake in Cruise. The deal will bring GM closer to catching up with Waymo, and it will prevent Honda from falling out of the race entirely.

But Cruise is the real winner

When Cruise was acquired by GM, it sold for just $581m. But this new investment from Honda values the company at $14.6B, meaning the value of the company has increased 25x in less than 2 years.  

Cruise also got $2.25B from Softbank just a few months ago — and its founders continue to run the company independently as GM’s youngest senior directors. 

So you’ve got to ask yourself: Who’s really in the driver seat at GM?

Daily briefings, straight to your inbox

Business and tech news in 5 minutes or less

Join over 1 million people who read The Hustle


How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

Data shows where markets are headed.

And that’s why we built Trends — to show you up-and-coming market opportunities about to explode. Interested?

Join us, it's free.

Look, you came to this site because you saw something cool. But here’s the deal. This site is actually a daily email that covers the important news in business, tech, and culture.

So, if you like what you’re reading, give the email a try.