Oxford-based post-quantum cryptography startup PQShield has today announced a $37m Series B funding round, led by Addition.
Founded in 2018, the company develops quantum-ready hardware, software and communications technology.
Its products are designed to safeguard against quantum threats to conventional digital cryptography —which is baked into countless internet browsers, corporate databases and connected devices, including cars and planes, around the world.
The funding announcement comes as the National Institute of Standards and Technology's (NIST) post-quantum cryptography standards are due to be ratified in the US, meaning companies there will have to comply with new, quantum-ready rules.
Tech companies like Apple, Meta, Zoom and Signal have all already announced a migration to post-quantum cryptography.
“The serious adoption of post-quantum cryptography has already started,” says PQShield’s CEO Ali El Kaafarani. “But with the official standards being out in the next few weeks, it’s not a matter of risk analysis anymore, it’s a matter of compliance.”
PQShield is already serving customers like chip-making giant AMD, chip manufacturer Microchip Technologies, aerospace and defence company Collins Aerospace and chip manufacturer Lattice Semiconductor with a combination of software and hardware design solutions, as well as advising businesses and governments on the transition to quantum security.
The quantum threat
Pre-existing cryptography methods — namely RSA and Elliptic Curve Cryptography (ECC) — could be easily broken by a quantum computer, because they were originally just designed to withstand attacks run on classical computers.
“Whatever keys you have, however large they are, quantum computers can still break them, for RSA and Elliptic Curve Cryptography (ECC) because the underlying mathematics becomes easy on a quantum computer,” says El Kaafarani.
Whatever keys you have, however large they are, quantum computers can still break them.
The race for a fully functioning quantum computer is on. Google and IBM are famously in on it, but so are startups: Europe has more than 147 startups working with quantum technologies. In 2023, $781m was raised by startups working in the sector in EMEA.
However, there's a chance a quantum computer will never materialise.
“There is a possibility, but the probability is very low, that this will happen. But on the other hand, the probability that a quantum computer might happen is much higher. High enough for it to be considered as a risk,” says El Kaafarani. “You have to understand the probability of each of those events and build your plan accordingly.”
With the Series B, El Kaafarani says PQShield hopes to strengthen its position in the market when it comes to technical talent and commercial capacity. Hiring talent, he says, is one of the hardest parts of running a cryptography company.
“The real asset at PQShield is the team,” he says. “And that is the most difficult part of building a cryptography company in the world as we speak now because cryptography expertise is very, very rare. It’s a multidisciplinary topic that sits between computer science and mathematics, hardware and software, and some physics.”
