American Family Insurance has partnered with Microsoft Corp. to launch an accelerator for start-ups focused on home automation.
Although the accelerator will be located on Microsoft’s campus in Redmond, Wash., near Seattle, it has the potential to produce benefits for the Madison-based insurer and perhaps the state’s entrepreneurial community.
The accelerator, which the companies launched Tuesday, plans to choose 10 start-ups for the inaugural program by July 17 and have them start their four-month program in mid-August.
“We would love it if Wisconsin investors took a look at these companies alongside us and made some early bets on next-generation technologies,” said Dan Reed, director of American Family Ventures.
Reed also encouraged Wisconsin-based start-ups with home automation technologies to apply to the accelerator by either going through the Microsoft Ventures website or contacting him and his team through the American Family Ventures website.
Greg Lynch, a lawyer in the Madison office of Michael Best & Friedrich who works with start-ups, said his firm is already encouraging several of them to apply to the accelerator.
American Family, which will have representatives on the selection committee, plans to make a minimum $25,000 investment in each of the start-ups, Reed said. Microsoft, which runs start-up accelerators in Bangalore, Beijing, Berlin, London, Paris and Tel Aviv, doesn’t take equity stakes in companies that join its accelerators.
American Family will also bring to the accelerator “deep industry experience, important consumer insights and a wealth of homeowner knowledge that would be impossible for young companies to gain access to on their own,” the companies said.
American Family has gotten into the business of working with start-ups in a big way. The Madison-based insurer recently started a subsidiary called American Family Ventures that plans to invest $50 million in start-ups over the next four to five years.
The fact that Microsoft is co-branding the accelerator with American Family “helps put Wisconsin on the map,” said Troy Vosseller, co-founder of the gener8tor start-up accelerator that operates in Madison and Milwaukee. But Vosseller said he’s hoping that even more will result from the partnership.
“We’re anxious for Microsoft Ventures to start looking at innovation coming out of Wisconsin and make their first investment in a Wisconsin company,” he said.
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