Microsoft to Give Smart Home Startups a Nudge

By Pedro Hernandez  |  Posted 2014-06-18 Print this article Print
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Eyeing an opportunity in the burgeoning market for home automation solutions, Microsoft launches a new startup accelerator.

Microsoft wants to play a role in advancing the connected home, and it has teamed with American Family Insurance to bring new innovations to market. The companies announced on June 17 during Microsoft’s Global Startup Day event in San Francisco that they have launched a new Microsoft Ventures Accelerator at the software giant's Redmond, Wash., campus with a focus on home automation startups.

Portraying the budding market for home automation solutions as "ripe for startup innovation," Steve Guggenheimer, corporate vice president of Developer Experience and Evangelism for Microsoft, said that both Microsoft and American Family Insurance are working closely to "provide a one-of-a-kind experience for entrepreneurs," in a statement. "Startups accepted into the program will gain critical industry insight to build companies with the potential to have an enormous impact on our lives."

In typical accelerator fashion, Microsoft will provide space, mentorship, technical support, networking opportunities and other business-boosting resources. Microsoft pledges to offer this support "without taking any equity," stated the company. Those accepted into the accelerator can, however, opt for a $25,000 equity investment from American Family Insurance, eighth largest home insurer in the United States.

Microsoft's interest in home automation dovetails neatly with the company's efforts to help lay the groundwork for the Internet of things (IoT), one of the biggest enterprise trends in tech this year, according to the company. "With advances in sensor technology, cloud services and analytics tools, the homestead is the next frontier for startup innovation," stated Guggenheimer in a blog post. According to an accompanying infographic from PitchBook, a private equity and venture capital research firm, home automation accounts for 21 percent of all the funding invested in IoT.

The combination of "Microsoft's deep technical expertise with American Family Insurance industry expertise," argued Guggenheimer, will pave the way for "unique opportunities for startups building smarter, safer homes."

The latter is clearly a priority for American Family Insurance. The insurer's managing director, Dan Reed, said in prepared remarks that one of the program's aims is to help "early stage companies bring new products and services to market that can make our policyholders' homes and lives safer."

Microsoft isn't the only major tech company with its eye on the smart home market.

During Apple's Worldwide Developer Conference (WWDC) earlier this month, the company unveiled HomeKit, a platform that provides remote control services for the connected home. The company has enlisted the help of Philips, Honeywell, Kwikset and Neatamo for products that support the Siri-enabled home automation framework.

Google Senior Vice President Sundar Pichai hinted during an interview at SXSW (South by Southwest) in March that his company is working on home mesh networking. On Jan. 13, the company spent a whopping $2.3 billion to snap up Nest, maker of WiFi-enabled smart thermostats and smoke alarms. "They're already delivering amazing products you can buy right now—thermostats that save energy and smoke/CO alarms that can help keep your family safe," noted Google CEO Larry Page at the time.


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