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Kano has raised $1 million from Microsoft as the DIY PC maker releases an upgraded version of its Windows-based computer, which will get expanded international distribution.

The investment marks another step in Kano’s ongoing transformation. Once a feisty indy project, the U.K.-based startup made modular computers using an operating system based on open-source Raspberry Pi. But last year it struck a partnership with Microsoft to build a limited batch of 1,000 Windows-based PCs.

Now Microsoft has deepened its partnership with Kano to help it expand distribution from North America and the U.K. to Japan and the United Arab Emirates.

“We’ve gotten Microsoft behind it in a big way,” said Kano founder Alex Klein. “[Microsoft CEO] Satya Nadella got the product in July [and] fell in love with it. And we ended up sealing the deal, and Microsoft invested in Kano.”

The investment comes at a critical moment for Kano, which disclosed earlier this year that it had lost $13.7 million during 2019 and was hunting for $7.5 million in additional venture capital. Beyond the Microsoft funding, Klein confirmed that “we have raised what we were after in 2020,” though he did not disclose the final amount or the investors.

The company turned heads last year when it revealed the new Windows version of its modular computer. Kano had previously developed a computer kit for teaching kids how to assemble a basic PC, along with software to help them learn to code. Taking on a big corporate partner might have posed a risk to Kano’s indy image, but the partnership is giving the company the marketing muscle that comes with being an official OEM partner. Klein said he’s hoping his company will compete with giants like Dell and HP for big contracts.

After producing 1,000 of the Windows PC that was introduced last year, the company is now shifting into large-scale production, Klein said.

The new version includes upgraded features, including a new Celeron processor for faster performance, 10 hours of battery life, a USB-C charger, physical volume buttons, two USB 3.0 sockets, and Bluetooth 5.0 (Intel AC9560 max speed 1.73Gbps).

The company is also launching Kano Software Studio for its Windows machine, a version of its Kano World platform created for its traditional PCs that offers various educational tools for kids. And new classroom tools allow teachers to track assignments via Microsoft Teams. Finally, the company is introducing peripherals, including a modular webcam, headphones, and a mouse.

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