“Nature isn’t classical, damn it, and if you want to make a simulation of nature, you’d better make it quantum mechanical,” declared physicist Richard Feynman, one of the forefathers of quantum computing, during a lecture in 1981. “And by golly it’s a wonderful problem, because it doesn’t look so easy.”
Forty years later, money is pouring into that ‘wonderful problem’. In the past 12 months, around $1.1bn has been invested in quantum computing start-ups, according to business intelligence provider GlobalData, up 13.5% on the previous year.
This venture capital funding is essential as quantum computing moves out of university research labs towards commercial adoption, says Robert Penman, associate analyst for thematic intelligence at GlobalData.
“Quantum advantage – where a quantum computer can outperform a classical computer in specific tasks – won’t emerge until at least 2030,” he says. “Currently, research is directed at solving incredibly challenging hardware problems.
“Consequently, as the industry is not yet profitable, venture finance is vital for its development.”
Quantum computing start-ups: betting on the future
The market for quantum computing is predicted to grow from $412m in 2020 to $8.6bn in 2027, according to analyst company IDC. Today’s ‘limited’ offerings will soon be replaced by a new generation of quantum computing platforms, IDC predicts, triggering a “surge in customer demand” towards 2027.
To date, the market has been mostly limited to national research laboratories and supercomputing labs. But commercial adoption is getting started, beginning with the tech giants. The likes of Microsoft, Amazon, Google and IBM have all partnered with quantum computing start-ups in order to provide quantum-based cloud services, or are developing their own machines.
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IBM, for example, aims to have built its own quantum computer with 1,000 qubits – the point at which quantum computers are expected to challenge the performance of classic counterparts – by 2025, while Google plans to have one by 2029.
Other organisations are dipping their toes in the water. Earlier this year, car maker BMW signed a deal with French start-up Pasqal to use its quantum processors to simulate complex materials. And the UK’s Ministry of Defence purchased the government’s first quantum computer from UK provider Orca Computing.
However, all of these initiatives are still experimental, and there is much to be worked out before quantum machines provide a reliable alternative to classical computers. Companies are investing now to have the infrastructure and capabilities in place when quantum computing takes off, says Raghunath Koduvayur, head of communications at Finnish start-up IQM.
As it stands, the quantum computing market is wide open. “No company can claim to be ahead in quantum, as it is still early days,” says GlobalData’s Penman. “While the likes of IBM and Google, along with several start-ups, have enjoyed measurable success, it is impossible to predict which company or technology will go on to dominate quantum computing.”
Today’s quantum computing start-ups are therefore long-shot bets that their chosen approach might define the next computing paradigm. “A lot of these ideas aren’t going to work,” explains Todd R. Weiss, an analyst who covers quantum computing for Futurum Research.
As such, the next decade will be a process of weeding out the bad ideas. “Quantum will start as a big funnel in terms of ideas and will converge and squish together into five or ten serious companies in five to ten years,” he predicts.
The biggest fundings rounds for quantum computing start-ups in 2022
To provide an overview of the state of quantum computing, Tech Monitor identified the largest funding rounds for quantum computing start-ups so far this year.
The start-ups that received the five largest funding rounds are as follows:
Origin Quantum ($148.2m) - China
Investors: CITIC Securities Co Ltd; Bank of China Group Investment Limited; China International Capital Corporation (Hong Kong) Limited
China's Origin Quantum was founded in 2017 out of the CAS Key Laboratory of Quantum Information.
In a roadmap published last year, the company said it hoped to realise 1,024-qubit quantum processors by 2025, which would allow it to solve specialised problems in various industries and develop new industry fields.
IQM ($130.6m) - Finland
Investors: Tencent Holdings Ltd; Bayern Kapital GmbH; Santo Venture Capital GmbH; OurCrowd Ltd; Open Ocean SAS; MIG Fonds; Maki Venture Oy; Matadero QED, LLC; EIC Fund; TESI; Vsquared Ventures; Salvia GmbH; WF World Fund Management GmbH; QCI SPV; Tofino and Varma
IQM was founded in 2018 out of Aalto University and the VTT Technical Research Centre of Finland following breakthroughs in qubit reset, readout and thermal management for large-scale quantum processors.
“We are one of the only quantum companies in the world which delivers on-premises quantum computers,” the company’s head of communications Raghunath Koduvayur told Tech Monitor. “[We have a] four-cubic-metre machine that can be delivered to your place right now as a full-stack quantum computer.”
IQM aims to have 20-qubit machines available for customers this year and 50-qubit machines next year, Koduvayur says. It is working towards a 1,000-qubit machine but has not announced a time frame.
Silicon Quantum Computing ($90.6m) - Australia
Investors: Undisclosed
Australia's Silicon Quantum Computing was launched in 2017 by the Australian Commonwealth Government and others to commercialise research developed at the Centre of Excellence for Quantum Computation and Communication Technologies in Australia.
It is focused on developing a full-stack quantum computer built in silicon and became the first company to develop an integrated circuit manufactured at the atomic scale in June this year.
This atomic-scale circuit operates as an analogue quantum processor and has already been used to model the quantum states of a small, organic polyacetylene molecule.
“SQC’s engineers are now scaling the technology to address more industrially relevant molecules and as a business, we look forward to developing targeted industry partnerships to address their simulation needs,” said its chair Stephen Menzies.
Atom Computing ($60m) - USA
Investors: Prime Movers Lab; Third Point Ventures L.P.; Innovation Endeavors; Prelude Ventures LLC; Venrock Ltd.
Atom Computing, based in California, was founded in 2018 with the aim of building a “truly scalable” quantum computer out of individual atoms.
Its goal is to generate error-free, scalable quantum computers and was the first to create a quantum computer made of nuclear-spin qubits, which some scientists predict will be the easiest path to scaling up quantum computers for industrial use.
Last year, Atom unveiled a quantum computing system called Phoenix that can hold 100 qubits in an "exceptionally stable" state, it said. The system uses the nuclear spin state of strontium-87 atoms to represent zero and one states for the qubit.
Oxford Quantum Circuits ($46m) - UK
Investors: The University of Tokyo Edge Capital Partners; British Patient Capital Ltd; Oxford Investment Consultants LLP; Oxford Science Enterprises; Lansdowne Partners Limited
Oxford Quantum Circuits was spun out of the University of Oxford's physics department in 2017 by Dr Ilana Wisby. It has patented a three-dimensional processor architecture, named ‘Coaxmon’, that it is more scalable than 2D offerings, the company says.
As the number of qubits grows, “2D circuits require increasingly intricate engineering to route control wiring across the chip to the qubit,” the company says. “This both degrades the quality of the qubits and increases the chance of costly engineering errors.
“Our core innovative technology – the Coaxmon – solves these challenges: it has a three-dimensional architecture that brings key componentry off-chip for vastly increased simplicity, flexibility, engineerability and – crucially – scalability."
Oxford Quantum Circuits offers quantum computing as a service (QCaaS), through commercial and public cloud platforms. Access to its 8-qubit machine, Lucy, is available via Amazon’s Braket quantum cloud platform. The company’s customers include Cambridge Quantum which runs its IronBridge number generator on the machine.
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