Microsoft's New Investment Arm Helps Finance 13 Startups

By Pedro Hernandez  |  Posted 2016-10-05 Print this article Print
Microsoft Ventures

Microsoft Ventures, which is focused on early innovations, has funded 13 startups since it was founded this past spring.

In the few short months since its debut, Microsoft Ventures has invested in more than a dozen technology startups, the company announced this week.

Microsoft established the venture fund in May. Describing the move as a shift in its investment strategy, Microsoft said the fund would focus on early-stage startups that are developing technologies on the forefront of cloud computing, machine learning and data security, among other cutting-edge IT disciplines. (The former Microsoft Ventures unit was rebranded Microsoft Accelerator.)

Historically, the company's funding activities often involved some sort of commercial deal where the underlying technology had reached a certain level of maturity or popularity. Nagraj Kashyap, corporate vice president of Microsoft Ventures, said in statement that Microsoft was "not a part of the early industry conversations on disruptive technology trends" and that the new fund would help earn his company "a seat at the table."

Now, just over four months after its launch, Kashyap revealed that his fund has already backed 13 startups, 10 of which he publicly disclosed. (The remaining three have yet to make a formal funding announcement.)

"In the world of business SaaS [software-as-a-service], we've invested in Helpshift and Outreach. In cloud infrastructure, we've invested in Rescale," wrote Kashyap in an Oct. 4 blog post. San Franscisco-based Rescale, a cloud high-performance computing (HPC) specialist, announced on June 16 that the company raised $14 million in a Series A round of financing after attracting seed funding from a handful of high-profile investors, including Jeff Bezos and Richard Branson.

"In productivity and communications, we've invested in three companies—Comfy, Layer and Kahoot in the world of education," Kashyap said. "In machine learning, we've invested in CrowdFlower and more recently, CognitiveScale."

CrowdFlower and Microsoft already enjoy a cozy relationship. The startup's platform, which takes a "human in the loop" approach to honing an organization's artificial intelligence (AI) capabilities, uses Microsoft's Azure Machine Learning service.

Austin, Texas-based CognitiveScale develops industry-specific machine intelligence software. The company on Oct. 4 announced Microsoft Ventures had participated in a $25 million Series B investment round in the company. The funds will enable the company to explore mixed-reality applications—Microsoft's take on augmented reality—using the HoloLens headset and Azure.

"We are entering a new era of immersive computing in which the world is our browser and we are the cursor. Our goal is to embed cognitive systems of intelligence into a whole range of new personal computing applications and business processes, from customer engagement, to procurement and regulatory compliance, using hyper-personalized holographic projections and mixed reality," Akshay Sabhikhi, CEO of CognitiveScale, said in an Oct. 4 announcement.

On the security front, Microsoft invested in "cyber-security foundry" Team8 and Aqua Security, a virtual container security startup. "We have been working with Microsoft because they have been very active in the container market," Dror Davidoff, co-founder and CEO of Aqua Security, recently told eWEEK's Sean Michael Kerner.


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