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GM bought cruise for 1 billion. Softbanks stake would value it at 11 billion. Even if GM put in some money into cruise their return on investment seems pretty g

GM bought cruise for 1 billion. Softbanks stake would value it at 11 billion. Even if GM put in some money into cruise their return on investment seems pretty good.

harigov 8y ago
I think softbank isn't just a regular VC. My speculation is that it may provide other services like dealing with govt(s) that makes this offer even more compelling. Otherwise I don't see why GM would need an investment from softbank.
- karthikb 8y ago
  It’s not always just about the money. One of the most effective ways to ensure that a long-term project stays alive at a big company as people come and go is to create an external tie-up or partnership.
- endorphone 8y ago
  Since being bailed out, GM's debts have exploded once again, rapidly hitting the $100B mark with an average interest around 5%. A $2.5B cash infusion, and the added confidence, is very much something they would need.
- Fricken 8y ago
  How much do you think a robotaxi costs to manufacture? I think it's a lowball estimate, but for argument sake, let's say they're each worth $150k. At that price $2.25 billion will get you 15,000 robotaxis, and that's far from the only expense. Waymo has announced a plan to deploy 20,000 vehicles in 2020, and that is what GM is up against. You just can't have enough money in the bank if you're comitted to a scaled commercial robotaxi deployment and are planning for world domination.
barbegal 8y ago
The investment today is only $0.9 billion with a further $1.35 billion at an unknown time in the future. This makes a present valuation of only $4.5 billion. And GM must commit $1.1 billion now. So GM will have invested a total of $2.1 billion for a share of Cruise which is valued at 80% of $4.5 = $3.6 billion.
- trhway 8y ago
  >This makes a present valuation of only $4.5 billion. in 2 years from 1B->4.5B (with GM original stake of 1B growing 2.5x during those 2 years(4.5 - 1.1 - 0.9 = 2.5)). This is why i love tech. We call it "only" here.

GM bought cruise for 1 billion. Softbanks stake would value it at 11 billion. Even if GM put in some money into cruise their return on investment seems pretty good.

harigov 8y ago

I think softbank isn't just a regular VC. My speculation is that it may provide other services like dealing with govt(s) that makes this offer even more compelling. Otherwise I don't see why GM would need an investment from softbank.

karthikb 8y ago
It’s not always just about the money. One of the most effective ways to ensure that a long-term project stays alive at a big company as people come and go is to create an external tie-up or partnership.
endorphone 8y ago
Since being bailed out, GM's debts have exploded once again, rapidly hitting the $100B mark with an average interest around 5%. A $2.5B cash infusion, and the added confidence, is very much something they would need.
Fricken 8y ago
How much do you think a robotaxi costs to manufacture? I think it's a lowball estimate, but for argument sake, let's say they're each worth $150k. At that price $2.25 billion will get you 15,000 robotaxis, and that's far from the only expense. Waymo has announced a plan to deploy 20,000 vehicles in 2020, and that is what GM is up against. You just can't have enough money in the bank if you're comitted to a scaled commercial robotaxi deployment and are planning for world domination.

barbegal 8y ago

The investment today is only $0.9 billion with a further $1.35 billion at an unknown time in the future. This makes a present valuation of only $4.5 billion. And GM must commit $1.1 billion now. So GM will have invested a total of $2.1 billion for a share of Cruise which is valued at 80% of $4.5 = $3.6 billion.

trhway 8y ago
>This makes a present valuation of only $4.5 billion. in 2 years from 1B->4.5B (with GM original stake of 1B growing 2.5x during those 2 years(4.5 - 1.1 - 0.9 = 2.5)). This is why i love tech. We call it "only" here.