The move today by General Motors’ Cruise division to raise $1.15 billion in equity funding from institutional investors including mutual fund T. Rowe Price and existing investors at a $19 billion valuation means two things: First, the disconnect between valuations in the self-driving car field and the commercial viability of vehicles that don’t yet exist is bigger than ever. Second, SoftBank’s investments in self-driving car developers have helped make other strategic and financial investors more comfortable in placing a bet on established developers in the field.
SoftBank put $900 million into Cruise last year, prompting Honda to put in $750 million with a promise of more in the future. Now comes T. Rowe Price, though Cruise did not say how much the fund is contributing. (Cruise also counted General Motors, which owns the vast majority of Cruise, among the latest investors. It is unclear why that was necessary, and spokesmen for Cruise and SoftBank declined to comment on the deals’ terms.)
Two weeks ago SoftBank, an existing investor in Uber, helped facilitate a $667 million investment by Toyota and Denso into Uber’s self-driving car division, with SoftBank contributing $333 million. Waymo also has been looking for outside investors, and Ford, which owns Argo AI, has been too. More money does not necessarily make the road to fully autonomous cars a lot easier for Cruise. But it’s always better to raise money when a company doesn’t need it rather than when it does.