Venture capital investment arm of the global tech giant Microsoft is returning to India. The focus of their investment efforts will be Indian start-ups working on blockchain, Internet of Things (IoT), and autonomous vehicles.
Microsoft Ventures, i.e. the venture capital (VC) arm of Microsoft, was formally launched in 2016, after it was separated from the company’s accelerator program. They have invested in 45 start-ups, and some of their big-ticket investments were the following:
- US $ 23 million for customer support software maker Helpshift;
- US $ 15 million for big data start-up Unravel Data.
Microsoft Ventures had a presence in India till 2016, and they had announced that 12 start-ups in India had been selected for their accelerator program. Even after 2016 they have been active in India, although the operations were managed from their Redmond, Washington, USA headquarters. Flipkart and Ola are among the Indian start-ups that have already worked with Microsoft.
Currently led by Nagraj Kashyap, Microsoft Ventures have recently relocated their headquarters to Silicon Valley. They also now have offices in New York, London and Tel Aviv. These offices, and the planned one in India, point to Microsoft Venture’s thrust on being close to where the action is, instead of operating from the headquarters of the parent company.
According to an interview with India’s Economic Times, Microsoft‘s Peggy Johnson, Executive Vice President, Business Development, has provided an outline of the investment strategy that Microsoft Ventures will follow in India:
- The focus will remain on Microsoft‘s core competencies, i.e. cloud, artificial intelligence (AI), machine learning (ML), and connectivity. However, the company recognizes the uniquely dynamic nature of start-up scene in India, and will certainly focus on blockchain.
- The investments will be largely Series A and B, however, some seed funding may also come into play.
- Investments will be within the range of US $ 2-8 million.
It remains to be seen how the start-ups in India will receive the potential offers of investment from Microsoft Ventures. Typically, start-ups view corporate VCs with some reservation. A start-up can easily get information about a VC from other entrepreneurs who have worked with the firm earlier, and reputation of a VC firm matters a lot. Unlike other VCs, who employ long-term fund managers, corporate VCs allow their employees to switch roles according to the situation. Some observers don’t believe that the corporate VCs are able to convince entrepreneurs to accept fund from them.
It will be interesting to watch if Microsoft, with their technology portfolio and deep pocket, can overcome reservations of entrepreneurs about Microsoft Ventures. Peggy Johnson believes that the highly diverse team they have built up in Microsoft Ventures will go a long way, and she is very optimistic about their plans in India.