Microsoft launches new venture capital arm

Microsoft is joining the long list of companies moonlighting as venture capitalists.

The Washington-based tech giant unveiled its official VC arm in a blog post Monday, rolling out a plan to make early-stage investments in companies developing technology that could augment Microsoft’s core products.

The move comes at a time when more corporations are getting involved in the venture capital world — everyone from 7-Eleven to JetBlue now has a VC arm. Tech companies have long been at the forefront of corporate venture capital. Google recently amplified its startup focus with the launch of an in-house incubator called Area 120.

This isn’t Microsoft’s first foray into VC — it runs an accelerator for early-stage startups, and reportedly has made large later-stage investments in companies including Uber. But by launching an official VC arm, Microsoft hopes to fill what it sees as a gap in its venture investing.

“Because we would often invest alongside commercial deals, we were not a part of the early industry conversations on disruptive technology trends,” wrote Nagraj Kashyap, corporate vice president of the newly formed Microsoft Ventures. “With a formalized venture fund, Microsoft now has a seat at the table.”

The launch is part of a larger and somewhat confusing re-branding. The Microsoft Ventures name formerly applied to the company’s accelerator, which will be re-named Microsoft Accelerator.

The new Microsoft Ventures will launch first in the Bay Area, Seattle, New York City and Tel Aviv, with the goal of further expansion, according to the blog post. Kashyap didn’t set a target number of investments for the fund, but expressed interest in companies developing products around Office 365.

More broadly, you can expect to see Microsoft investing in companies doing work on cloud services, machine learning and security.

“In the coming days and weeks ahead and beyond, you will see us showing up as an investor in companies that complement these spaces and those that aim to disrupt how business is done today,” Kashyap wrote.

Nagraj Kashyap came to Microsoft from semiconductor company Qualcomm, where he ran Qualcomm’s VC arm.

Photo: People shop at the Microsoft Store at Westfield Valley Fair mall on the day of the Windows 10 launch in Santa Clara in 2015. (LiPo Ching/Bay Area News Group)

 

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