Microsoft will revive its venture arm in India by setting up an office this year with a local team to look for and invest in startups in areas such as autonomous vehicles, Internet of Things (IoT) and blockchain that generate huge data as they scale up and potentially become a customer for its technologies.
The corporate venture arm of Microsoft had a presence in the country a few years ago, but managed by a team from Redmond, its global headquarters in the US. It, however, continues to run a startup accelerator, helping 12-14 emerging firms to stand up before they seek funding from venture capital firms to grow business.
ET reported that Peggy Johnson, who was hired by CEO Satya Nadella as global vice-president three-and-half years ago, has revamped the venture arm by bringing her former Qualcomm colleague Nagraj Kashyap to lead it and relocating its headquarters to Silicon Valley with offices in New York, London and Tel Aviv, Israel and the planned one in India.
“We look largely around our core ambitions — cloud infrastructure, AI, machine learning (ML) and connectivity. But India is unique because the productivity here is mobile only. We have learnt a lot and look forward to learning more,” Johnson told Economic Times. “We generally focus on Series A and B (funding), with a little bit of seed. But largely Series A and B and it is anywhere between $2 million and $10 million. It will be part of our global corpus.”
The venture arm allows Microsoft to get a “signal into the startup community” and put the software behemoth back into the conversation with the venture capital firms to understand emerging technology developments. It also allows Microsoft to back startups that come out of the accelerator who otherwise raise funds from venture capital firms or other corporates. “Basically, we lacked a fund before. When the companies graduated from accelerator we did not have the ability to invest in them. So now we will have that option. We have that option in the US, in India,” said Johnson, who has been engaging with the VC community in India.
Microsoft had a venture arm in India headed by Rahul Sood before he left the firm in 2014 to start on his own. Observers, however, say that corporate venture arms have a tough road ahead to convince entrepreneurs to get their backing.