The top 25: Nagraj Kashyap, M12

Microsoft Ventures, the corporate venturing subsidiary of software producer Microsoft, rebranded to M12 this month in a bid to set itself further apart from its parent’s accelerator initiative.

The new name – M for Microsoft, and 12 because “entrepreneur” is a 12-letter word – comes two years after Microsoft restructured Microsoft Ventures from a global network of accelerators into a full-fledged corporate venture capital unit under Nagraj Kashyap, who reports to Microsoft’s dealmaker-in-chief, executive vice-president Peggy Johnson, who made her own move from Qualcomm in 2014.

The two different iterations of Microsoft Ventures proved too confusing, both to portfolio companies from the original and new unit and internally among M12 staff, Kashyap, head of M12, told Business Insider (BI).

The accelerator is now known as Microsoft ScaleUp and is part of Microsoft for Startups, an initiative established in February 2018 that also includes cloud services credit programs BizSpark and BizSpark Plus.

M12, which has already backed more than 50 startups over the past two years, also added another four companies to its portfolio by investing a total of $3.5m in the winners of its startup competition, Innovate.AI. The winners also received credits for cloud platform Microsoft Azure.

In a world where funding is so easy to come by that startups can afford to shop around for the perfect investor, Kashyap told Business Insider M12 stood apart from other corporate VC firms.

M12 is empowered to make fast decisions and offer competitive terms, Kashyap said, but by being backed by the $735bn market capitalisation of Microsoft it can offer tools and technology that no other startup focused on enterprise customers can match.

“We are much more patient. We don’t raise a fund every three years,” he told BI. “If we can’t help them, why are we investing in them?” added Kashyap.

Thanks to M12, Microsoft also became a customer of Livongo, and now its diabetes management tools are available as an employee benefit across the company, BI said.

And from a standing start of just himself two years ago when Kashyap came over from Qualcomm Ventures, M12 is now about 21 people, working out of offices in San Francisco, New York City, London, Seattle, and Tel Aviv.

Kashyap for the Powerlist profile that as well as the fact that M12 had “crossed 50 companies in record time”, he was proud over the past year of having “built the most diverse investment and overall team in VC or CVC [with a] unique model: financially driven with dedicated portfolio development team”.

Of these deals, there have been more than “15 uprounds showing momentum of portfolio [and M12 was] one of the most active AI [artificial intelligence] investors”.

In an interview with Andrew Gaule for Global Corporate Venturing, Kashyap said: “The experience of the team members ranges from somebody like Leo de Luna, who has worked 15 years in the VC industry, in VC firms, secondary firms. It is really a vast amount of knowledge that he brings to the team. He has a track record of many successful exits as well.

“Matt Goldstein came from Trinity Ventures. He has a lot of experience in areas like containers, devops [development and operations], security, fintech. He covers what we call the middle of the stack. Leo would cover the top.

“Rashmi Gopinath, [a GCV Rising Star 2017] comes from experience at Intel Capital, but also, on the operating side, she was in a couple of startups in senior business development roles, including Couchbase. So she covers both the investing side and the operating side, and she has significant experience on the cloud infrastructure side.

“We have Mony Hassid in Israel, who is a veteran of CVC. He has been with many CVCs including Motorola, Qualcomm and now Microsoft. We have Lisa Nelson in Seattle, and she knows Microsoft in and out, and has been working in Microsoft many years.

“The team is a balance, some from the financial VC industry, some who have worked in the corporate venture capital industry and some that have worked in Microsoft. That combination provides the key ingredients for us to be successful, both on the investment side, and then, post-investment, getting the right connections back to Microsoft.”

Kashyap built a global corporate venturing platform at Qualcomm Ventures, netting multiple $1bn exits, including Waze, NetQin and InvenSense during his tenure, and with plenty of others in the portfolio, such as China-based phone maker Xiaomi, that have exited or could do since his departure.

For the Powerlist 2016, Kashyap said: “At Qualcomm, I was lucky enough to be part of a company that led the charge in the smartphone revolution, enabling creation of many of big companies of the past few years, including Waze, Xiaomi and Uber. I believe that the transition to the cloud will result in another wave of new large companies and I joined Microsoft to be part of this next big platform change.”

Kashyap joined Qualcomm Ventures in 2003 and oversaw the North America ventures team until 2007 when he was appointed head of global venturing before starting at Microsoft in January last year. He grew the Qualcomm Ventures portfolio to more than 150 investments in 2015 from 10 in 2003 and established a well-regarded early-stage competition, QPrize, which rewards entrepreneurs around the world with prize money.

He began his career as a software engineer at Nortel, Motorola and 3Com/US Robotics before moving to management consulting firm PRTM, now part of PricewaterhouseCoopers. Interviewed by Andrew Gaule, he said: “I started my career as a software engineer, and I am still a sort of recovering software engineer at this point, but I have moved on to a business role at previous companies.”

The business world has benefited from the shift.