American vehicle manufacturer General Motors has acquired Cruise Automation, a Silicon Valley-based software company for self-driving car technology. By doing so, General Motors is seeking to integrate Cruise's advanced software to support its own development of autonomous vehicle technology.
Details of the acquisition deal were not officially disclosed, but according to Fortune, the transaction is worth more than $1 billion in a combination of cash and stock. Cruise was backed by Silicon Valley venture investors Y Combinator and Spark Capital and had recently raised $18.8 million. Talks between the two companies originally started when Cruise announced its plan to raise a new round of venture capital funding. General Motors was, at first, interested in investing before the talks shifted into an acquisition discussion.
After the acquisition, Cruise will continue to operate independently as a unit within General Motors' special team dedicated to the autonomous car technology, Autonomous Vehicle Development Team. The startup will also stay based in San Fransisco.
General Motors is racing against other automakers to develop the autonomous car technology. "Fully autonomous vehicles can bring our customers enormous benefits in terms of greater convenience, lower cost and improved safety for their daily mobility needs," said the president of General Motors Dan Ammann on the company's official statement.
On the other hand, Cruise has also been dedicating itself to develop an autonomous vehicle software. The company is known for successfully created a kit that allows drivers to convert certain types of cars into autonomous vehicles. The recent acquisition, however, will focus on integrating Cruise's technology into GM's manufacturing process.
"GM's commitment to autonomous vehicles is inspiring, deliberate, and completely in line with our vision to make transportation safer and more accessible. We are excited to be partnering with GM and believe this is a ground-breaking and necessary step toward rapidly commercializing autonomous vehicle technology," said Cruise founder and CEO Kyle Vogt. The company is one of the few companies which have permits from the state of California to test driverless cars.
This is hardly General Motors' first move into expanding its business portfolio. According to The New York Times, the company has invested $500 million in a strategic alliance with ride-hailing service Lyft. Furthermore, General Motors has also established its own brand, called Maven, for its own car-hailing initiatives.
With the new acquisition, General Motor expects to integrate Cruise's technology in its manufacturing process, supporting the company's ambition to compete in the driverless cars' markets. The acquisition deal is reported to worth more than $1 billion in cash and stock.
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