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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:


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