Microsoft launches Bing Fund, an early-stage fund & incubator programme

Microsoft has launched an early-stage fund and incubator programme called Bing Fund for startups focusing on mobile and Web experiences and incorporating "fresh insights." Besides funding, the IT giant will offer various add-on services, such as providing subsidies to use Bing's APIs and giving access to technologies developed by Microsoft Research. Startups selected for this programme will also be mentored while companies located in Seattle will get work space in Bellevue campus (in a special section nicknamed the Bingcubator), a few miles away from the company's main Redmond campus.

According to Bing Fund site, it makes angel investments and works closely with startups to take their businesses to critical mass. It is also looking to partner with accelerators to find suitable candidates and may also accommodate repeat entrepreneurs. Although it is not a venture fund, Bing Fund will partner with the VC community.

The new fund will focus on just a few startups at a time and as companies graduate, new ones will be accepted to fill their spots. Microsoft will invest around $50,000-$100,000 in early-stage startups through standard convertible notes. Also, for a period of 4-8 months, it will provide advice, design and development help, and discounted access to Microsoft's Azure Data Marketplace APIs. Startups will be also introduced to potential partners or customers.

Other two funds run by Microsoft are Microsoft Accelerator for Windows Azure and BizSpark. While BizSpark is open to all privately held software startups which are less than three years old and generate less than $1 million in annual revenue, Microsoft Accelerator for Windows Azure is more suitable for first-time entrepreneurs. On the other hand, the Bing Fund is better suited for startups which are not as established as the BizSpark crowd, but still have gained some momentum and possess business plans.

Is there a possibility that Microsoft would buy some of the startups incubated at Bing Fund? "While we can't make any guarantee, acquisition is always a possibility," the website says.

(Edited by Sanghamitra Mandal)