General Motors has bought out SoftBank Vision Fund 1’s stake in Cruise, a self-driving startup, for $2.1 billion, Bloomberg reported Friday (March 18).
SoftBank now has no involvement in the business, while GM holds 80% ownership. In addition, GM said it plans to invest another $1.35 billion in Cruise, making up for the amount that SoftBank had planned to invest once Cruise deploys vehicles in a ride-sharing business, which it is now planning to do.
The deal will do away with a capital diversification play that ex-Cruise CEO Dan Ammann was pushing. Ammann was fired last December after pushing for an initial public offering (IPO).
GM CEO Mary Barra and Cruise founder Kyle Vogt, who replaced Ammann as CEO, have said there are no current plans for an IPO.
“Why not just go public? It’s a major distraction, especially right now,” Vogt said on Twitter after GM announced the deal. “Cruise just launched a driverless ride hail service in [San Fransisco], and we want 100% of our energy focused on scaling up and delighting our customers.”
The report notes that this sale is a return on SoftBank’s almost four-year investment, in which it committed $2.25 billion for an 11% stake in Cruise as of May 2018. Cruise began offering free rides to the public in late January, which triggered SoftBank’s second investment requirement, which the latter company didn’t complete.
General Motors also recently rolled out around 50 new subscription services that will be debuted over the next three or four years, though there weren’t many specifics on the various services.
See also: GM Rolling out Dozens of New Subscription Offerings
GM North America President Steve Carlisle, speaking with investors earlier this year, said that larger screens on GM’s electric vehicles “will enable us to bring more of the data-oriented software products to the customers.”
This might mean a variety of things, including entertainment services — like movies or game streaming — or services like maintenance reminders and systems to help with driving.
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