After hosting a first successful round of start-ups, Microsoft’s Azure Accelerator is back for more — bigger and better than before. “Bigger,” in the sense that it will be hosting 13 start-ups working on the Next Big Thing instead of the eleven it hosted in the first round. And “better,” because the experience garnered in the first round has made Microsoft Israel smarter about how to help direct, guide, and develop the raw talent ensconced within Azure’s Herzliya facilities, said Tzahi (Zack) Weisfeld, Microsoft Israel’s director of business development.
“Over 300 companies, consisting of 1,000 entrepreneurs, applied to enter the Microsoft Accelerator for Windows Azure, but we could only accept 13,” said Weisfeld. Based on the results of the first group, which began its four-month participation in the first accelerator group last March, the chosen few have a busy — and enriching — future to look forward to, with the new program running from December through March.
“In seven months since we started the program, we have literally done the equivalent of seven years of work that most other accelerators in the world are able to accomplish,” said Weisfeld. “So far, $6.5 million has been invested in 8 of the 11 start-ups from the first group, about $800,000 on average per start-up,” a sum that accelerators in the US were able to achieve for their graduates only 6 or 7 years after the companies go out on their own.
In fact, at least one company — Stevie.tv, which has developed a platform that allows users to mash up their Facebook and Twitter feeds into a kind of television program — announced this week that it received $1.5 million in new funding.
The Azure accelerator is aimed at early-stage start-ups, for which Microsoft provides office space, training, mentoring, and other benefits. Among the benefits will be inclusion of participating start-ups in the Microsoft BizSpark program, which provides free software and development tools, and a “starring role” at Think Next, Microsoft Israel’s annual innovation event that highlights the company’s most promising upcoming technologies.
Microsoft does not seek any equity in the companies it approves for the accelerator, unlike nearly all other accelerators, which require a partial ownership of companies they adopt, usually between 6% and 8%. The start-ups, both in the current and first round, are mostly involved in enterprise software, cloud services, and mobile technology.
And there is an additional benefit for the new recruits, said Weisfeld. “The start-ups will be working with teams from the Technion under the guidance of Professor Merrick Furst of the Georgia Tech College of Computing, whose record in developing successful start-ups has been amazing.” Furst has developed the first, and so far only, scientific methodology designed to get start-ups from point A to point B – from inception to success. Together with top business pros from the Technion, Weisfeld believes that some of Furst’s magic will rub off on the Israeli start-ups.
In addition, Weisfeld said, companies will be able to take advantage of an investment program from the Plus Ventures investment fund that will be facilitated by the Accelerator. Start-ups will get a note with very favorable terms, the note will allow them to close on valuation at later stage and not at the beginning of the program.
Among the new crop of start-ups are Pixtr, an iPhone app (currently in beta) that “fixes” photos based on other photos you have taken, adjusting new ones using algorithms that determine which ones you saved (and apparently approve of). Telesofia Medical is working on a platform that automatically creates personalized medical videos. Screemo is developing an innovative platform for digital signage. And Shopetti is developing a “unique social shopping platform for women,” said founder Shefa Weinstein.
The Azure accelerator was considered a big success in Microsoft, so much so that the Israeli model is being utilized in India and China, and is likely to be exported to other countries as well, said Weisfeld. “We’ve got a great physical plant for them and a fantastic mentoring program, with over 100 top professionals who work with the start-ups regularly. And the accelerator staff is here to help them all hours of the day or night.”
It’s a program that is appropriate for a “start-up nation,” he added — and one that will help keep Israel that way.