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Microsoft executive Peggy Johnson
The new Microsoft Ventures fund was created under the auspices of Peggy Johnson, Microsoft executive vice president for business development. (GeekWire File Photo)

Microsoft has launched its first formal venture fund, planning to make new investments in companies that align with its own interests in areas including cloud computing, enterprise technologies and machine learning.

The new fund, known as Microsoft Ventures, was announced overnight. It will be led by Nagraj Kashyap, the former Qualcomm Ventures leader, who joined Microsoft earlier this year, and housed within Microsoft’s Business Development team, led by Microsoft executive vice president Peggy Johnson, also a Qualcomm vet.

New Microsoft Ventures leader Nagraj Kashyap
New Microsoft Ventures leader Nagraj Kashyap

“In Microsoft’s history of engaging with and supporting start-ups, we’ve done a lot of investing, but not a lot of early stage,” says Kashyap in a post announcing the new fund. “Because we would often invest alongside commercial deals, we were not a part of the early industry conversations on disruptive technology trends. With a formalized venture fund, Microsoft now has a seat at the table.”

Microsoft declined to disclose the size of the fund, but Kashyap says “you should expect steady activity over the course of the year” in the company’s areas of focus.

“Given that the move to the cloud remains the single largest priority for the industry, identifying the bleeding-edge companies who complement and leverage the transition to the cloud is key to our investment thesis,” he says. “Companies developing product and services that complement Azure infrastructure, building new business SaaS applications, promoting more personal computing by enriching the Windows and HoloLens ecosystems, new disruptive enterprise, consumer productivity, and communication products around Office 365 are interesting areas from an investment perspective.”

He adds, “In addition, and on a more horizontal axis, you should expect to see us invest in companies who are doing work in the areas for machine learning and security.”

Microsoft Ventures will consist of a small team with an initial presence in the San Francisco Bay Area, the Seattle area, New York and Tel Aviv. The Redmond, Wash.-based company had previously taken a less structured approach to investing in startups, in contrast with other tech companies such Intel and Google, which have their own formalized venture programs.

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