Microsoft launches new startup accelerator in Redmond, focusing on home automation and the ‘Internet of Things’

Microsoft-Ventures-OGMicrosoft announced today that it is launching a new startup accelerator in Redmond focused on home automation and the Internet of Things, in partnership with American Family Insurance. It’s designed to promote startups that are searching for new ways to improve how people use their homes.

The accelerator, which was unveiled as a part of Microsoft’s Global Startup Day in San Francisco, will be housed on Microsoft’s campus in Redmond, and will run from September to December of this year. Companies that get accepted into the accelerator will be given mentorship and education about how to build companies that do well on the global marketplace.

Rahul Sood

Rahul Sood

While home automation is often discussed in the context of new hardware like the Nest thermostat or Phillips’s Hue lightbulbs, Microsoft Ventures General Manager Rahul Sood said that software startups should feel welcome to apply.

“I want to be really clear that this isn’t just a hardware accelerator,” Sood said in an interview with GeekWire.

The partnership with American Family Insurance is also a boon to the companies that get accepted into the new accelerator. The insurance company will be offering a $25,000 equity investment to those startups that want the extra funding. In addition to money, the startups will also be able to test their new products with a set of American Family Insurance customers, to get real-world feedback about what they’re doing.

The accelerator is a part of Microsoft Ventures, which was created last year to pull together all the different services Microsoft offers to startups. Microsoft Ventures already runs accelerators in Bangalore, Beijing, Berlin, London, Paris and Tel Aviv, but this accelerator will be the company’s first in the U.S.

If past is prologue, the accelerator will serve companies well: so far, 78 percent of graduates from Microsoft’s other accelerators have raised additional funding. On average, those funding rounds come out to more than $1 million.

The news comes a couple months after Microsoft announced a new version of Windows built for embedded applications like home automation, but companies won’t be required to use any Microsoft products. That said, companies could use a number of Microsoft’s tools as they build whatever they’re working on, including Microsoft Azure, the company’s cloud platform.

Microsoft doesn’t take an equity stake in the companies that move through their accelerators, but getting companies started on products like Windows and Azure could provide the company with a toehold in the future of home automation.

Companies interested in learning more about the accelerator, or filing an application can do so here. Here’s an infographic from Pitchbook about how venture capitalists have reacted to the home automation market:

PitchBook_2Q2014_IoTHomeAutomation.png-550x0

  • http://www.verespej.com/ Hakon Verespej

    The link to the application is broken. Need to add the http:// so it’s not treated as a relative link.

    • Blair Hanley Frank

      Fixed! Thanks for pointing that out.

  • lenslens1

    This feels kinda wrong to me, because Microsoft has very little experience in how to run a successful start-up. It is maybe a venture capital firm specializing in these areas that is using the Microsoft ecosystem for street credit.

    • narg

      very little?!?! What planet are you from. Easiest example of their success in “startups” is the Xbox. Another is Surface. Shall I continue???

      • zacharycohn

        Those are not startups, those are just new products.

        It’s not exactly the same when you have a few billion dollars in budget, hundreds of employees to immediately staff a project, an established supply chain, and preexisting partnerships with industry leaders to play with…

  • vserve87

    Sounds like a pettty good deal to me dude.

    WentAnon.tk

  • narg

    No surprise here since the Google acquisition of Nest…