Microsoft Launches Venture Capital Group

Microsoft has started a formal venture fund to invest in early-stage companies working on cloud-related projects. Microsoft Ventures, announced in a company blog post Monday, aims to fill the gap between Microsoft’s large-scale investments and acquisitions and the assistance it provides to startups through its Microsoft Accelerator program.

Among the products and services Microsoft is interested in funding are new business SaaS apps, and those that extend and complement Azure, as well as Microsoft’s existing Office 365, Windows and HoloLens ecosystems. The group will also invest in machine learning and security, Microsoft says.

“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,” wrote Nagraj Kashyap, the corporate vice president overseeing the new group.

Microsoft acknowledged that when it comes to building relationships with small, cutting-edge companies, it’s still catching up to its Silicon Valley competitors.

“Because we would often invest alongside commercial deals [in the past], we were not part of the early industry conversations on disruptive technology trends,” wrote Kashyap.  “With a formalized venture fund, Microsoft now has a seat at the table.”

The team will be “small and nimble,” said Kashyap, with a presence in San Francisco, Seattle, New York and Tel Aviv.