M12 AI Fund

M12, established in 2016, is Microsoft's corporate venture capital fund. It focuses on investing in early-stage companies that are working on innovative solutions in areas like artificial intelligence (AI), cloud infrastructure, cybersecurity, developer tools, vertical SaaS, and Web3/Gaming. M12’s objective is to accelerate technological growth through strategic investments and partnerships, helping startups grow by providing them with access to Microsoft’s tools, services, and expertise.

Initially launched as Microsoft Ventures, M12 rebranded in 2018 to avoid confusion with other Microsoft programs. The fund is managed by Michelle Gonzalez, Corporate Vice President and Global Head, who joined in 2021. Since its founding, M12 has invested in over 100 companies, including 15 unicorns and 6 IPOs.

M12  invests between Series A and D funding rounds and offers more than financial backing. The fund provides operational support, technical expertise, and strategic guidance, leveraging Microsoft’s ecosystem to open doors for portfolio companies. Examples of M12 investments include Unbabel, a company focused on AI-driven translation services, and d-Matrix, which develops AI inference platforms. These companies have benefited from the investment, using Microsoft’s network to secure large deals and expand globally.

M12 also focuses on sectors such as cloud infrastructure, where it supports companies building scalable data architectures. In cybersecurity, M12 invests in solutions like identity threat detection and post-quantum encryption. The fund also backs AI tools and developer solutions that streamline cloud-native development.

M12 is headquartered in San Francisco, with offices in Seattle, New York City, Tel-Aviv, and London. With a dedicated team and advisory board, M12 continues to drive innovation by partnering with disruptive companies that are shaping the future of technology.

This professional approach to venture capital aims to foster growth in both emerging and established markets.

M12, Microsoft’s corporate venture capital fund, was officially established in March 2016 under the name Microsoft Ventures. Initially, Microsoft Ventures served as an umbrella for Microsoft’s accelerator and seed-stage funding operations, supporting early-stage startups by providing resources and guidance for growth. In August 2014, Microsoft Ventures collaborated with the Deshpande Foundation to launch the Sandbox Startups incubator in India. The incubator aimed to support entrepreneurs outside major cities by offering entrepreneurial resources and opportunities in Hubli.

In March 2016, Microsoft restructured the venture capital arm, transitioning Microsoft Ventures into a corporate venture fund focused on strategic investments. This marked a shift from startup enablement to direct investment in promising companies. On April 11, 2017, M12 made key investments, such as in Synack, a security company, which raised $21 million from M12, Hewlett Packard Enterprise, and Singtel.

In 2018, Microsoft Ventures was rebranded as M12, with "M" representing Microsoft and "12" symbolising the 12 letters in "entrepreneur." This rebranding was meant to distinguish the fund from Microsoft’s accelerator programs. In March 2019, M12 invested in Markforged, a 3D printing company, and Skedulo, a work scheduling platform. It also invested in AnyVision, a facial recognition company, which later underwent an ethical audit by Microsoft, led by former U.S. Attorney General Eric Holder, to ensure compliance with Microsoft’s biometric surveillance principles.

In 2020, M12 led a $22 million Series B funding round in Arkose Labs, a fraud prevention platform, and invested in SuperAwesome, a company specialising in digital engagement for children. It also partnered with Honeywell Ventures to invest in FarEye, a logistics startup.

In 2021, Michelle Gonzalez joined M12 as its Corporate Vice President and Global Head, further shaping its strategic focus. Under her leadership, M12 enhanced its alignment with Microsoft’s overall strategy, focusing on investments in key sectors like AI, cloud infrastructure, cybersecurity, and vertical SaaS. M12 also expanded its advisory board, which includes industry experts like Dr. Charlie Miller and Dr. Matthias Troyer.

By 2024, M12 had invested in over 100 companies, including 15 unicorns and 6 IPOs. Some notable portfolio companies include Unbabel, a company providing AI-driven translation services, and d-Matrix, which develops AI inference platforms. M12’s support extends beyond financial backing, as it helps portfolio companies scale and access new markets through Microsoft’s network. It also supports cybersecurity startups like HiddenLayer and developer tools such as Split.

M12’s latest work focuses on supporting early-stage companies that are developing cutting-edge technologies, such as AI-driven platforms, Web3 applications, and cybersecurity solutions. With offices in San Francisco, Seattle, New York City, Tel-Aviv, and London, M12 continues to be a key player in venture capital, driving innovation and technological growth by partnering with disruptive companies across a range of industries.

M12, Microsoft’s venture capital fund, follows a well-defined investment strategy to support early-stage companies developing innovative technologies. Its investment criteria focus on areas that align with Microsoft’s broader strategic interests and technological advancements. Here are the key criteria M12 considers when making investments:

• Focus Areas: M12 primarily invests in startups working in specific areas, including Artificial Intelligence (AI), cloud infrastructure, cybersecurity, developer tools, vertical SaaS (Software as a Service), and Web3/Gaming. These sectors represent high-growth opportunities that align with Microsoft’s expertise and market goals.
• Stage of Investment: M12 typically invests in companies during their early stages, usually from Series A to Series D funding rounds. This allows M12 to provide financial and strategic support to companies when they are growing and scaling their operations.
• Innovative Technology: M12 looks for startups that are creating groundbreaking solutions. The focus is on companies that are not just following trends but are driving technological change in their industry. For instance, M12 has invested in companies like Unbabel, which uses AI for language translation, and d-Matrix, which is developing AI inference platforms.
• Strong Founding Team: M12 places significant emphasis on the strength and experience of the founding team. A strong leadership team with a clear vision for the future and the ability to execute its plans is crucial in M12’s decision-making process.
• Partnership Potential: M12 seeks companies that can benefit from a close relationship with Microsoft. Portfolio companies gain access to Microsoft’s vast ecosystem, including its cloud services, AI tools, and enterprise networks. This partnership potential is a key factor in the investment decision, as M12 aims to help companies scale and access new markets.
• Global Market Opportunity: M12 looks for companies with the potential to grow on a global scale. Startups that address large, global markets or solve universal problems are more likely to be considered for investment. M12’s portfolio includes companies from various sectors that are positioned to make a significant impact globally.
• Ethical Considerations: M12 adheres to ethical standards, especially in areas like AI and biometric surveillance. For example, M12 conducted an audit of AnyVision, a facial recognition company, to ensure its compliance with Microsoft’s ethical principles on biometric data usage.

M12 provides more than just financial investment to its portfolio companies. It offers access to Microsoft’s extensive ecosystem, including its cloud infrastructure, AI tools, and security solutions. M12 supports companies with strategic guidance, helping them scale their operations, enter new markets, and improve their products. The fund connects startups with Microsoft’s global network of partners and customers, opening doors to valuable business opportunities. Additionally, M12 offers technical expertise, helping companies develop solutions that are secure and innovative. Its ethical framework also ensures investments are made in alignment with responsible technology development, particularly in AI and cybersecurity.

M12’s mission is to accelerate the future of technology by investing in early-stage companies that are driving innovation in key areas such as AI, cloud infrastructure, cybersecurity, and developer tools. By providing financial support, strategic guidance, and access to Microsoft’s technology and global network, M12 aims to empower startups to grow and succeed. The goal is to promote long-term partnerships that not only help portfolio companies scale but also contribute to the development of responsible and impactful technologies that benefit businesses and society.

M12 has invested in a wide range of innovative companies across various sectors. Below is a selection of companies from its portfolio, each working on transformative technologies that are shaping the future.

• Unbabel
  Unbabel combines human expertise with AI to deliver high-quality translation services, removing language barriers for global customer support.
• d-Matrix
  d-Matrix develops AI inference platforms that accelerate AI workloads, making it commercially viable for enterprises to deploy AI solutions at scale.
• Armada
  Armada builds cloud infrastructure solutions, focusing on helping organisations handle data at large scales and improve efficiency in data processing.
• Neon
  Neon is working on modernising cloud data infrastructure, offering high-performance solutions for handling large-scale data analytics and storage.
• Volley
  Volley is a voice-based AI gaming company, creating interactive, voice-driven gaming experiences that use cutting-edge AI to engage users.
• Bolster
  Bolster provides AI-driven cybersecurity solutions that protect against online fraud and phishing threats, safeguarding businesses from digital attacks.
• HiddenLayer
  HiddenLayer focuses on securing AI systems, providing tools to protect machine learning models from adversarial attacks and ensuring AI integrity.
• Space and Time
  Space and Time combines AI and blockchain to ensure data integrity, offering solutions that make all transactions verifiable and tamper-proof.
• Applied Intuition
  Applied Intuition builds software tools for autonomous vehicle development, helping automotive companies design, test, and deploy self-driving systems.
• Beamery
  Beamery is a talent management platform that uses AI to help businesses find, engage, and retain talent, improving recruitment and employee experience.
• CloudLanes
  CloudLanes delivers cloud-native security solutions for protecting sensitive data during migration to cloud environments.
• Synack
  Synack is a cybersecurity company that combines human intelligence with AI to identify vulnerabilities and safeguard digital assets from cyber threats.
• Arkose Labs
  Arkose Labs provides fraud prevention technology that protects online businesses from account takeovers, phishing attacks, and automated abuse.
• Evisort
  Evisort uses AI to streamline contract management, offering solutions to automate contract review, analysis, and negotiation processes for enterprises.
• Skedulo
  Skedulo offers work scheduling solutions that help businesses manage mobile workforces efficiently, optimising scheduling, and task allocation.
• AnyVision
  AnyVision specialises in AI-driven facial recognition technology, delivering biometric solutions for security and surveillance applications.
• Directly
  Directly combines AI with human expertise to provide scalable, on-demand customer service solutions for large enterprises.
• Authomize
  Authomize secures cloud environments by managing identity access, ensuring only the right people have access to sensitive data and resources.
• Modl.ai
  Modl.ai creates AI tools for the gaming industry, focusing on improving player experience by offering game studios powerful AI-driven insights.
• Bakkt
  Bakkt provides a digital asset platform, enabling businesses to engage with cryptocurrencies and manage digital assets securely.