Microsoft is expanding the Startup Founders Hub, its self-service platform that provides founders with free resources, including Azure credits, with a new incubator program called the Pegasus Program.
Pegasus will select startups with products that “meet a market need” and give them up to $350,000 in Azure, GitHub and LinkedIn credits plus advisor support, as well as “access to the best of Microsoft technology,” said Hans Yang, general manager director at Microsoft for startups.
“Given the current economic climate, today’s launch of the Microsoft for Startups Pegasus program cannot be timely,” Yang said in an email conversation with AapkaDost. “In a capital constrained environment, startups must be able to demonstrate traction and revenue growth. Startups selling to large enterprises are challenged by long sales cycles, complex regulatory requirements, and high demands on scalability and reliability. At the same time, enterprise companies know that disruption is coming, but they want to partner with startups that can meet their strict requirements.”
Pegasus is a two-year program open to startups already active in Microsoft’s Founders Hub and customer-facing products built on the Microsoft Cloud. A core requirement is early alignment of the product to market, Yang stressed, including sales growth, a sales force and a “proven” go-to-market model.
“This signals to us that they are ready to market to corporate customers,” added Yang. “Our industry-focused experts, when evaluating potential Pegasus startups, also ensure that their solutions solve the current industry challenges facing these industries. This ensures that we offer companies relevant solutions in which they can invest in order to achieve a return on their investment in the short term.”
All startups chosen for Pegasus are assigned a vertical lead to generate sales opportunities and act as an advisor. They also get a success manager, responsible for helping them get to market and “ensuring they have the best resources to generate and develop deals.”
Finally, Pegasus companies receive a dedicated cloud solutions architect to support their technical success and facilitate “preferred” access to Azure’s AI offerings. These architects act as a single point of contact within Pegasus, helping start-ups connect with Microsoft customers and conducting compliance and security audits.
Yang noted that while Pegasus naturally favors startups built on Azure technology, the program doesn’t lock companies or partners into any particular cloud. They can use multiple clouds, including established names like Google Cloud and Amazon Web Services, if they want, as long as they meet their customers’ needs.
“The program is really driven by the needs of enterprise customers, and while many of our customers enjoy the synergies of using multiple Microsoft solutions together, we are focused on their needs,” said Yang.
There is no limit to the number of startups that can join Pegasus, but Yang says a special focus will be on companies in industries such as healthcare, AI, retail and cybersecurity. He expressed tremendous enthusiasm for generative AI, a particularly hot market right now.
“As the AI era takes shape, large enterprises are looking for ways to embrace generative AI, presenting a great opportunity for startups that can help them on that journey,” said Yang. “In general, we believe that every startup, regardless of the industry they operate in, should explore how they integrate generative AI into their product roadmap.”
In a private preview, Microsoft claims that Pegasus has already supported more than 100 startups with an average deal size of more than $300,000. In total, it has pledged more than $35 million to those startups in tech credits.
“We tested the Pegasus program to refine the matchmaking process, working with business-to-business startups on a daily basis…” Yang said. “We help make their products and go-to-market plans enterprise-ready, then work with our sales team to bring them to market and directly to corporate buyers. The results are promising, with Pegasus startups seeing an average deal size of $350,000 and an active pipeline of more than 1,300 opportunities.
Pegasus complements Microsoft’s several ongoing early-stage and late-stage startup efforts, including partnerships with VCs and accelerators to support 10,000 companies in Africa over the next five years. The tech giant also maintains the ISV Success Program, a program designed to help early-stage software vendors build and publish apps.