As performance and power consumption of modern micro-chips are increasingly limited by electrical on-chip interconnects, all-optical interconnect systems promise data transmission at speed of light and wavelength- division multiplexing. To realize complex networks, active devices, like lasers, need to be integrated on Si. III-Vs are excellent candidates for optical devices, however, their integration on Si is challenging due to a significant lattice and thermal mismatch. Template-assisted selective epitaxy (TASE) was recently developed by our group, allowing for the selective growth of III-Vs from a small Si seed in a confined oxide template. In this work, we extend TASE towards optical devices and demonstrate the monolithic integration of InGaAs lasers via a novel approach using a virtual substrate (VS) in a two-step templated growth. First, μm2 sized 60 nm thick InGaAs VSs are grown by MOCVD using TASE on SOI. Subsequently, 500 nm oxide are deposited onto the VS and patterned in arbitrary shapes like disks, and rings. In a second InGaAs growth, the defined vertical cavities are filled. The investigated structures have diameters of 1.7 μm, thicknesses of 0.5 µm and total cavity volumes of 0.5 λ30. Photoluminescence spectroscopy reveals a broad spontaneous emission peak around 1.1 μm (FWHM = 150 nm) that increases linearly with pump power for low excitation powers (<< 2.6 pJ/pulse). Above excitation threshold, a strong emission peak emerges at 1.1 μm (FWHM = 7 nm). The Input-Output curve (log- log, T = 10 K) exhibits the characteristic S-shape which constitutes a strong indication for the lasing operation. The onset of the lasing threshold is observed up to 200 K with a characteristic temperature of T0 = 192 K.