Microsoft Tardy But Bullish as it Enters the Berlin Accelerator Game

By David Knight |

Walking behind the temporary stage, past the kitchens and the ongoing renovations, and into a lift the inside of which was clad in so much protective plywood that it was almost pitch dark when the doors shut, it was apparent that Microsoft has a lot of work to do before its fancy new premises on Unter den Linden is up to scratch. The same can be said for the startup accelerator which will take up residence on the fifth and sixth floors of the building.

The tech giant is following in the footsteps of Deutsche Telekom, Axel Springer, ProSiebenSat.1, Mercedes Benz and Immobilienscout as large companies looking to engage with startups through acceleration – but Rahul Sood, head of Microsoft Ventures, was bullish about their chances of success on a trip to Berlin this week.

And Sood – an entrepreneur of 18 years before joining Microsoft – brushed off suggestions that the company was at a disadvantage by entering this late in the game.

The new accelerator will open in September in the building on the corner with Charlottenstrasse, with the first four-month program starting in November and featuring 10-15 teams. Microsoft Ventures, which has also taken over the previous Bing investment fund, already has accelerators in Israel, Bangalore, Beijing, Seattle and Paris and Sood said the results had been extremely good: of the 120 companies which have taken part in programs in the past year, 85 percent found funding within six months, 20 percent have reached Series A and four have already been acquired.

In addition, he said the selection process would not be product-based – i.e. they are not specifically looking for potential products to compliment those of Microsoft – but rather would take a much more general line.

Insisting that the company – which he dubbed the “original tech startup” – is serious about startups, Sood added: “We are here to build successful businesses and to provide them with unparalleled routes to customers. … [Berlin is] a very important space for us. It is one of the strongest ecosystems in Europe.”

The Microsoft building on Unter den Linden

The Microsoft building on Unter den Linden

But how successful will they be? It’s not only the big players they have to watch out for; many of Berlin’s would-be entrepreneurs naturally shy away from corporates and would instead lean towards ‘independent’ accelerators such as the Berlin Startup Academy and Startupbootcamp, which in a twist of timing is holding its selection days this weekend.

Addressing a roomful of journalists – apart from Silicon Allee, all of whom were from the mainstream German media – at the European BizSpark Summit on Thursday, the Microsoft contingent shrugged off concerns about attracting the right kind of application, and they had a whiff of ‘of course it will work, we’re Microsoft’ about them.

Not that that is necessarily a bad thing, of course, but perhaps they would do well to look at hub:raum, the awkwardly-monikered accelerator and incubator from Deutsche Telekom, and how hard it has tried to reach out to the tech community rather than expecting startups to come to it.

So what are the advantages of this accelerator? Aside from a rather dubious claim from Sood – “this is probably the most entrepreneur-friendly program out there” – he also pointed out that they will not ask for any equity from participants, that teams can develop on any stack using any language, and that there is a lot about Microsoft as a company that could come in handy. Specifically, this is the global networks of contacts it brings to the table.

“We are here to build successful businesses and to provide them with unparalleled routes to customers,” he added. “We are able to connect startups with customers.” This is taken further by a global alumni network being set up on Yammer (itself a former startup acquired by Microsoft).

Still, the doubts persist about the approach taken by this new accelerator in a city and ecosystem where cynicism comes naturally. Not that it’s a worry for Sood, who pointed to their experience in Tel Aviv.

“When we started [the accelerator there] last year, everybody laughed, but now everybody wants to get in – but there is no space. It’s the best accelerator in Israel right now. I think the same thing will happen in Berlin.”

Time will tell.