Microsoft seeks to invest in early-stage start-ups

June 1, 2016 // 12:05 p.m.

Tags: #funding #investment #microsoft #microsoft-ventures #nagraj-kashyap #start-up #vc #venture-capital

Microsoft has announced the formation of a new investment arm, Microsoft Ventures, which will focus on early-stage venture capital for start-up companies.

Microsoft has long invested cash in external companies: it was instrumental in the deal to send Dell private again, owns a chunk of Facebook, invested in Android port Cyanogen, and was even rumoured to be sniffing around AMD last year. These investments, however, have a common thread: they typically occur when a company has already proven itself in the market and has a reasonable headwind behind it.

'We’ve done a lot of investing, but not a lot of early stage. Because we would often invest alongside commercial deals, we were not a part of the early industry conversations on disruptive technology trends,' bemoaned Microsoft's Nagraj Kashyap in a blog post announcing the formation of a new investment group. 'With a formalised venture fund, Microsoft now has a seat at the table.'

Dubbed Microsoft Ventures - not to be confused with the company's previous Microsoft Ventures arm of its Developer Evangelism group, which has now been renamed the Microsoft Accelerator - the group will seek out start-up companies in which it can make early-stage investments, as Microsoft seeks to further diversify itself. Initially, it will focus on start-ups located in San Francisco, Seattle, New York City, and Tel Aviv, with expansion promised 'in the coming years.'

Kashyap has indicated that 'we’re not aiming to hit a specific number of investments annually, but you should expect steady activity over the course of the year' in the field of companies working on cloud technologies complementing Microsoft's own Azure platform, software-as-a-service, Windows- and HoloLens-based personal computing projects, security, and machine learning.
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