Microsoft starts its own venture capital division

Microsoft Ventures is Microsoft’s very own venture capital division. It’s main focus will be on early-stage startup investments. Don’t confuse this with Microsoft’s startup accelerator with the same name- that one’s being re-branded as Microsoft Accelerator.

In Microsoft’s official blog post announcing the change, Nagraj Kashyap, the corporate vice president of the new Microsoft Ventures, says that while the company has done a lot of investment in the past, it has not been focusing on investments in the early stage. What they have been looking at is investing alongside commercial deals. This is where their new venture capital division comes in. This new division will be more like Google Ventures, which takes risks on young companies for a potentially huge return.

One company that Microsoft invested in early was Facebook, which it pumped $250 million into back in 2007, reports Engadget. However, we should keep in mind that that was an investment in preferred stock at a $15 billion valuation, and more about ad sales than venture capitalism. What we can expect in the future is to witness Microsoft investing in a lot more companies at their nascent stages. This goes doubly for the companies whose focus complements the company’s existing products and services.

Microsoft Ventures will approach startups that augment and add value to the already existing technologies and products of the company, such as Azure-based cloud platform, or data compression firm. One of its key focus areas is to function in a manner that is similar to Google Ventures, to invest and bet on budding entrepreneurs and their technologies, writes techportal.in.

The venture capital team is looking at working in close cooperation with the multitude of organizations within the Microsoft ecosystem to work collectively and help the funded start-ups scale. The team is currently starting out with a presence in San Francisco Bay Area, Seattle, New York City and Tel Aviv(Israel) with the plan to expand to other countries in the coming months.

“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 areas I outlined.” writes Kashyap on his blog