
GM Cruise raises $1.15B at a $19B valuation from Softbank and Honda - jameslk
https://techcrunch.com/2019/05/07/gm-cruise-raises-1-5b-at-a-19b-valuation-from-softbank-and-honda/
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jayonsoftware
Having worked for GM I can say, one of the best things GM did was after they
bought Cruise they kept it as a separate company and away from GM bureaucratic
style of management where everything comes to die.

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fossuser
They've also relegated it to a sideshow on only one of their models, rather
than incorporating it into the core of their business.

I wonder if they're underestimating its importance or if there might be
internal fighting within GM.

This is another advantage Tesla has being all in towards the goal.

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solidasparagus
When an experimental project is made core to the company's traditional
business, the experimental project is usually slowed down. The fewer
dependencies between GM cars and Cruise, the better.

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fossuser
Maybe - an alternative historical example is Kodak and the digital camera.

They could have it as a standard feature on their cars rather than a high trim
level on one.

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tmh79
the problem with this analogy is that digital cameras worked, self driving
cars don't

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glennpratt
That's a bit of hindsight; digital cameras didn't work for many use cases for
a long time.

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javagram
Digital cameras also didn’t kill or injure people when their limitations were
reached.

I remember the QuickTake and all that. Yes, those small pixelated images
weren’t the same quality as film but they had other benefits instead.

Self driving cars currently aren’t in a state where they can do anything, even
waymo still has safety drivers.

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keymone
Did pre-digital cameras kill people?

Because dumb cars with dumb humans in them kill far more than self driving
cars do.

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badpun
Vast majority of accidents are caused by drivers (or cyclers, pedestrians) who
fail to safely engage in traffic. For the most part, cars don't kill people -
people kill people (or, get themselves killed).

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keymone
> people kill people

which is exactly why removing people out of the equation is the best way to
solve the problem. even fully educated and hyper responsible person is not
immune to judgement lapses, hallucinations, heart attacks, strokes, losses of
consciousness and many more modes of failure.

what's worst - even if i'm 100% sure about myself, _even if_ i take myself out
of the equation - there are still thousands murderous humans driving around
me.

humans should not be driving cars.

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amanaplanacanal
Unfortunately we don't have anything other than humans that can do the job
yet. And it's possible we might never have.

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keymone
we should try though

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InTheArena
For all of the criticism that Tesla gets for a incremental approach - they
still have the best semi-autonomous car in actual production and a difficult
but obvious path to full autonomy.

These guys could completely flame out without ever getting anything of value
out into the market.

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WhompingWindows
I have a decent sense of where Tesla and Waymo are at in the SDC development
competition, but where does Cruise stand? What kind of sensors, computation,
vehicles, where are they testing? In my limited knowledge, I'd guess Waymo is
ahead of these other players, but do we know who is "in second" or who is
second-closest to rolling out actual fully autonomous services?

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MegaButts
Nobody knows for sure since nobody is releasing anything meaningful (the
disengagement reports are both voluntary and self-policed, with no standard
for what constitutes a reported disengagement), but the general consensus is
that Cruise is second behind Waymo.

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haditab
Reporting the number of miles driven and the number of disengagements is
required by law in CA. It is not voluntary.

The reason some larger companies don't have reports is because they either
didn't do autonomous testing in CA (many test in AZ) or that they do not
consider their tests "autonomous" ( level 4 or above). This is the case for
Tesla autopilot.

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hef19898
Thanks for providing additional context

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freehunter
It gets really confusing talking about GM when they have an organization named
Cruise and also a product called the Cruze.

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saalweachter
Never fear; the Cruze has been discontinued, along with the Volt, which was
frequently confused with the Bolt.

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MR4D
It’s even worse - GM is not the same company that it was 10 years ago (and
many people lost money buying the stock because they didn’t know that!) !!

[https://www.thestreet.com/story/10544259/1/not-your-
fathers-...](https://www.thestreet.com/story/10544259/1/not-your-fathers-gm-
shares.html)

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sonnyblarney
$20B valuation for companies without products is a very, very frothy signal.

This kind of thing is waaay beyond what went on during the dot-com bubble,
where there was a lot of value being created without any business model
either.

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dclusin
Curious about the corporate structure behind this. Is Cruise a subdivision of
GM or is it an independent company with GM just being majority shareholder?

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thenewwazoo
Cruise is a separate, privately-held corporation that is partially owned by GM
(I'm not sure if they're majority or not any more).

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notfromhere
GM owns like 80%. I think the plan is to IPO it at some point, but if its
actually successful I can't see why they wouuldn't just make it a decision.

There's probably some value in locking themselves in as the exclusive provider
of Cruise-enabled cars

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zaphirplane
Well the fact they are getting funding from Honda says

Economy of scale and bigger r&d with a shared platform is better than getting
out innovated by Uber/google

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echelon
Why would Honda invest in a company 80% controlled by a competitor? Why would
GM let Honda invest?

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thenewwazoo
[https://www.theverge.com/2018/10/3/17931786/gm-cruise-
honda-...](https://www.theverge.com/2018/10/3/17931786/gm-cruise-honda-
investment-self-driving-car)

~~~
perfunctory
I don’t think the article answers the question.

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Animats
$19 billion valuation and it doesn't work yet?

Saw one of those making a left turn in San Francisco last week. The driver was
cranking the wheel. It was not autonomous.

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hacoo
I work for Cruise. For safety, our drivers keep their hands on the wheel at
all times, including when the vehicle is autonomous. The vehicle you saw may
have been in manual mode, but seeing the driver crank the wheel usually isn’t
a good way to tell.

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granshaw
I wonder how softbank’s vision fund has been doing, and whether that info is
available somewhere. Seems like they’re in on every late stage splashy tech
investment

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33MHz-i486
that is an absurd valuation ... you're telling me a pre-revenue company is
worth comparable amount to Lyft or United Airlines.

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YjSe2GMQ
Isn't Lyft also essentially a bet on autonomous driving? With (probably) an
even shorter time horizon to burn all their cash? Otherwise it's hard to see
them making enough profit to justify a 17B valuation.

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CPLX
> Isn't Lyft also essentially a bet on autonomous driving?

No. It’s an app-based taxi hailing service.

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YjSe2GMQ
Yeah right. But other than self driving cars I fail to see how they'll un-dig
themselves out of the money losing setup before burning through all the fresh
cash collected in the IPO. Hopefully I'll be wrong.

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kenneth
I see this criticism about Lyft and Uber all the time, but I don't understand
how both companies could not at some point simply raise their prices to make
the unit economics work. Sure, they'd lose some business… but given there is
almost no fixed costs to running their business, they'd still have large
profitable businesses. The only reason they don't is they're fighting for
marketshare with each other while in growth mode. But once both companies have
established their places in the world, saturated their markets, I don't see
why they wouldn't simply raise their prices accordingly.

Revenue would drop, profit would rise. Eventually, the market reach an
equilibrium.

Note they could also just raise the share they take for themselves and prices
simultaneously. If prices go up 20% and they up their fee from 20% -> 33%,
their income goes up 60% and their unit economics look a LOT better.

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hef19898
Well, up to now the mainly compete on price and booking comfort (apps) with
traditional taxis. So taxi prices are somehow giving an upper price limit,
maybe plus something for the better CX.

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naveen99
I would value the common shares with a pretty steep discount. I think we can
just ignore the 19 and focus on the 1.15 for now.

