Microsoft Ventures makes 13 investments in first five months — here are the startups it’s backing

Microsoft Ventures makes 13 investments in first five months — here are the startups it’s backing

by Taylor Soper on October 4, 2016 at 11:18 amOctober 4, 2016 at 12:40 pm

Microsoft Executive Vice President of Business Development Peggy Johnson. Photos by Dan DeLong for GeekWire.Microsoft Executive Vice President of Business Development Peggy Johnson. Photos by Dan DeLong for GeekWire.

Microsoft Ventures has invested in 13 startups since launching in late May as the Redmond company’s first formal venture fund — backing up-and-coming companies in areas including cloud infrastructure, software as a service, machine learning, security, productivity and communications.

Peggy Johnson, Microsoft’s executive vice president of business development, discussed the number publicly for the first time this morning during an interview on stage at the GeekWire Summit in Seattle, along with a list of 10 of the startups the company has backed. Microsoft’s investments in three of those companies — security technology company Team8 of Israel; machine learning company CognitiveScale of Austin, Texas; and the San Francisco-based Layer messaging technology company — haven’t been previously announced.

msftinvestments

Other companies in the Microsoft Ventures portfolio include:

  • Helpshift, the San Francisco-based mobile customer support technology company;
  • Outreach, the Seattle-based sales technology startup;
  • Rescale, a cloud-focused high performance computing company based in San Francisco;
  • Comfy, the smart building app based in Oakland, Calif.;
  • Kahoot, the game-based learning platform based in Oslo, Norway;
  • CrowdFlower, a San Francisco-based artificial intelligence startup
  • Aqua Security, the Tel Aviv-based security technology company for software containers.

The three remaining companies, not represented in the graphic above, haven’t yet publicly announced their funding rounds, the company said.

Johnson, an engineer and longtime Qualcomm executive who was Microsoft CEO Satya Nadella’s first senior executive hire two years ago, started the Microsoft Ventures fund along with Nagraj Kashyap, the former Qualcomm Ventures leader, who joined Microsoft earlier this year.

0971-day-1-geekwire-summit

Speaking on stage at the GeekWire Summit, Johnson said that she saw how Qualcomm used its venture fund to get an inside look into new technologies, business models, and trends.

“We weren’t in that conversation at Microsoft,” she said.

Johnson said that Microsoft Ventures has helped the company get into more discussions with startups and venture capitalists.

“Before, we might have had the ad-hoc discussions, but now we’re actually in the deal flow,” she said. “We get to see these technologies.”

As far as what industries the venture arm is looking at, Johnson said Microsoft is focusing in part on artificial intelligence and machine learning, and how those technologies can help improve Microsoft’s products and services.

“That’s one of the pillars of our strategy, infusing AI,” she said. “It’s the infusion of AI into everyday services that I’m really excited about. Any app or service I see, I wonder, ‘what would AI do for this?'”

She also noted that “the very nature of early stage companies, the enthusiasm, the passion — we love that.”

Day 1 of the GeekWire Summit 2016 at the Seattle Sheraton, October 4, 2016. Photo by Dan DeLong for GeekWire

Microsoft Ventures is part of a broader effort, led by Johnson’s business development group, to open Microsoft up to new strategic partnerships and relationships with companies in Silicon Valley and other parts of the tech world. The initiative reflects Nadella’s approach of working more closely with companies across the industry even in situations where Microsoft would otherwise be viewed as a competitor.

Ventures_200x200Microsoft Ventures consists of a small team with an initial presence in the San Francisco Bay Area, the Seattle area, New York and Tel Aviv. The Redmond company had previously taken a less structured approach to investing in startups, which was in contrast with other tech companies such Intel and Google, which have their own formalized venture programs. The company has declined to disclose the total size of the Microsoft Ventures fund.

In a blog post accompanying the announcement today, Kashyap outlines the strategic benefits that Microsoft pitches to potential portfolio companies, including access to Microsoft products, engineers, partners and customers, and help landing Microsoft as a customer, as well.

“We operate with a tremendous amount of autonomy, while representing Microsoft and helping the company identify new technology and partnership opportunities,” Kashyap writes. “We have set up operations close to the center of startup activity in all our locations and we work as a small, focused team, surrounded by entrepreneurial and technical talent. We are building something brand new – not unlike the founders with whom we seek to partner.”

More Special Coverage: GeekWire Summit 2016

Taylor Soper is a GeekWire staff reporter who covers a wide variety of tech assignments, including emerging startups in Seattle and Portland, the sharing economy and the intersection of technology and sports. Follow him @taylor_soper and email taylor@geekwire.com.

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