Business Insider | Matthew DeBord | March 11, 2016

GM reportedly spent over $1 billion on a tiny startup that holds a key to the future of driving

General Motors announced on Friday that it would acquire Cruise Automation, a San Francisco-based self-driving-car startup founded in 2013.

Neither GM nor Cruise disclosed the deal price.

However, Fortune's Dan Primack and Kristen Korosec reported that GM bought Cruise for more than $1 billion, in cash and stock combined, as much as 10 times the company's valuation. A separate report in Re/code seemed to confirm the price.

GM declined to comment on how much it paid.

Cruise had raised $20 million from various investors. The startup was a product of the Y Combinator accelerator program.

The acquisition is expected to close in the second quarter, pending regulatory approval.

"GM shares a common vision for the deployment of autonomous vehicles at a mass scale — a clear and vivid vision," said Kyle Vogt, Cruise's founder and CEO.

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He added that Cruise's 40 employees would remain in San Francisco but that the size of the team would be aggressively expanded. He declined to comment on how many new employees would join the company, which will be incorporated into GM's newly formed autonomous-driving group.

Vogt was previously involved with SocialCam and Twitch, the video-streaming site for video games that sold to Amazon in 2014 for $970 million.

In the past year, GM has been accelerating the pace of development for its electric- and autonomous-driving-vehicle technologies. The largest automaker in the US also made a $500 million investment in the ride-hailing service Lyft earlier this year.

The carmaker rolled out its Bolt electric car at the Consumer Electronics Show in Las Vegas in January, with plans to have it on the road by the end of 2016. GM also created a stand-alone ride-sharing brand this year, called Maven, and has placed autonomous-vehicle development in a single business unit.

"We're here to win," said GM president Dan Ammann, who joined Vogt to make the announcement. "We're super excited, and we have a very clear vision. We are very serious about leading, and we're committed to investment."

Both Ammann, who now sits on the Lyft board, and GM CEO Mary Barra have indicated the golden opportunity for the automaker is autonomous, electric-powered ride-sharing. The disadvantages of trying to integrate those technologies and services in conventional cars and trucks are overcome, in the thinking of GM's leadership, if fleets of driverless electric vehicles can be used in cities to provide mobility to customers who don't want to own a vehicle.

Ride-sharing is a very obvious place for GM to use Cruise's technology, Ammann said, as the automaker seeks to "fundamentally change the future of mobility."

Fully autonomous vehicles haven't yet hit the street, but GM and others, including Tesla, are now bringing partial self-driving technologies online in their cars. Ammann stressed that he expected GM's acquisition of Cruise to enable GM to bring full autonomy to market.

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