Microsoft has announced today that it is launching Microsoft Ventures, its own venture capital division which will focus on early-stage start-up investments. The news was announced by Nagraj Kashyap, a former member of Qualcomm Ventures who joined a pre-existing startup accelerator already called Microsoft Ventures in January. Kashyap is now the Corporate Vice President of the new Microsoft Ventures, while the former start-up accelerator has been rechristened into Microsoft Accelerator and will continue to "focus on start-up enablement around the world".
In the blog post, Kashyap explains that he worked with Microsoft’s EVP of business development Peggy Johnson to fill a gap in Microsoft's investment strategy, acknowledging that "because we would often invest alongside commercial deals, we were not a part of the early industry conversations on disruptive technology trends". Much like Alphabet's own venture capital investment arm Google Ventures, Microsoft Ventures will focus on early-stage investments (Series A and beyond) to "help us identify and harness those trends as early as possible".
Microsoft venture capitalism division will start as a small team with a presence in San Francisco/Bay area, Seattle, New York City and Tel Aviv, "with the goal of expanding to other geographies in the coming years". However, while Microsoft CEO Satya Nadella helped the company embrace the "mobile-first, cloud-first" world by acquiring many startups who developed great mobile apps (Outlook Mobile developer Acompli, to-do list app Wunderlist, Sunrise calendar and Swiftkey keyboard among others), Kashyap shared a pretty cloud-focused mission statement:
Given that the move to the cloud remains the single largest priority for the industry, identifying the bleeding-edge companies who complement and leverage the transition to the cloud is key to our investment thesis. Companies developing product and services that complement Azure infrastructure, building new business SaaS applications, promoting more personal computing by enriching the Windows and HoloLens ecosystems, new disruptive enterprise, consumer productivity, and communication products around Office 365 are interesting areas from an investment perspective.
In addition, and on a more horizontal axis, you should expect to see us invest in companies who are doing work in the areas for machine learning and security.
Last, Kashyap added that Microsoft Ventures is "not aiming to hit a specific number of investments annually" but we should expect the first wave of investments to be revealed "in the coming days and weeks".