General Motors (gm) this morning announced that it will acquire Cruise Automation, a San Francisco-based developer of autonomous vehicle technology. No financial terms were disclosed, but Fortune has learned from a source close to the situation that the deal is valued at "north of $1 billion," in a combination of cash and stock.
Talks between the two companies originally related to a strategic investment by GM in Cruise, which was planning to raise a new round of venture capital funding. But that quickly morphed into an acquisition discussion with the entire agreement getting hashed out in less than six weeks.
Cruise Automation had raised over $18 million in venture capital funding, most recently at a post-money valuation of around $90 million. Investors include Spark Capital, Maven Ventures, Founder Collective, and Y Combinator.
The three-year old company is best known for having created an aftermarket "kit" that allows buyers to convert certain types of cars―namely Audi A4 and S4 models―into autonomous vehicles for highway driving. But GM appears to be more interested in integrating Cruise's technology into its original manufacturing process.
General Motors spokesman Kevin Kelly said the company could not comment on the price or the terms of the deal. The transaction is expected to close in the second quarter. Cruise Automation will operate as an independent unit within GM and maintain its offices in San Francisco.
The plan is to grow the company aggressively and to get the best talent it can, Kelly told Fortune without providing further details on how many people might be hired. About 40 people work at Cruise Automation. The software company's website, which has been updated to reflect the acquisition by GM, is currently listing 10 job openings mostly in engineering.
The acquisition follows GM's recent move to create a team dedicated to the development of self-driving car technology within the company. The team of engineers and executives, led by Doug Parks, is responsible for all critical technologies in the car, including electrical design, controls and software, and safety integration, according to internal documents obtained by Fortune at the time.
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General Motors has been criticized for being slow to adopt new technology and for letting tech companies like Google take the lead in developing self-driving cars. However, GM has been quietly worked on self-driving technology, and its been one of the most aggressive automakers in adding Wi-Fi to dozens of new Buick, Chevrolet, Cadillac, and GMC models thanks to a AT&T 4G radio module providing the same kind of high-speed link one would expect from the latest 4G iPad or Samsung Galaxy.
And its preparing to roll out a level 2 semi-autonomous feature—a technical term that means two primary control functions are automated—known as Super Cruise will debut in 2017 on the Cadillac CT6 sedan, the only model on which it will be an option.
Over the past seven months, GM has also announced a number of initiatives that highlight its interest in unconventional transportation popularized by a new wave of startups, including a partnership and $500 million investment in ride-hailing startup Lyft.
It's end game: a network of self-driving cars within Lyft’s service that can shuttle passengers around town without a driver. GM is also developing a car-sharing service, joining a growing list of major automakers pushing into new businesses to attract customers who don’t own vehicles. The new business division called Maven will combine and expand several of GM’s existing test programs under one brand.
Editor’s note: This story has been updated since first publishing with a response from GM.