The race for quantum technology may have turned into a battle of the bucks, but don’t count Europe out just yet. What the region lacks in mega-funding it can make up for with a secret weapon: superbrains.
That’s the thesis, at any rate, of French investor Charles Beigbeder. His investment company Audacia and its fund Quantonation are putting €20m behind the idea that Europe’s scientific expertise can translate into successful European companies.
“The business potential of quantum today is the result of 30 years of scientific research; we can finally start imagining commercial and industrial innovation on the back of a long history of academic efforts,” Beigbeder says. “Europe has a good set of cards to play because it’s had a very strong track record of fundamental research, including in physics and maths.”
This goes against conventional wisdom, which is that Europe is losing the war to dominate quantum technologies.
More than 43% of quantum-technology innovations patented between 2012 and 2017 came from Chinese companies and universities, according to the European Commission, with the rest mostly from the US. The European Union has plans for €1bn of investment in quantum technologies over the next 10 years, far from the $10bn that has been announced by China.
What’s at stake?
Researchers are making progress at turning the abstractions of quantum physics into something concrete. They’ve started imagining how the strange behaviour of tiny particles can be harnessed for a range of applications, from super-fast computing to navigation tools or extremely precise timing devices.
It’s still early days in figuring out exactly which technology will become the standard and which applications will be scrapped. What’s ultimately at stake is the potential for a dramatic leap forward: quantum computing could mean quickly completing tasks that would take thousands of years for an ordinary computer.
Boston Consulting Group (BCG) has estimated that the quantum industry could be worth between $2bn and $5bn in the next five years and as much as $50bn within a decade.
Europe has a card to play
There is growing interest from investors in European quantum technology. In Europe, startups that have recently raised money in this space include the UK’s Riverlane, Austria’s Alpine Quantum Technologies (AQT) and Finland’s IQM.
Atomico’s State of European Tech report for 2019 found that 58% of quantum venture capital funding went to European startups last year, compared to 32% to US and Canadian startups and 5% for companies in Asia.
Beigbeder’s fund Audacia has bought stakes in companies including KETS Quantum Security, started out of the University of Bristol in the UK, and which raised €2.4m about a year ago.
Audacia is looking at opportunities across the board in quantum — startups developing applications from communications to sensing and computing — with an investment horizon of about 10 years.
Beigbeder says that Europe can utilise its intellectual powers to create viable quantum businesses, pointing that the continent has long been a world leader in scientific research.
“After the second world war, Europe needed engineers to rebuild itself,” says Beigbeder. “With quantum, we’ve entered an era that’s just as decisive, and it’s about having the right people who can imagine and create the future.”
The argument about European brains being the region’s golden ticket isn’t new. The region does have a history of Nobel prize winning academics and top-ranked science universities. But while top-notch engineering in countries including France and Germany has translated into champion industrial companies that gave the world high-speed trains and supersonic passenger planes, Europe is a laggard in the technology sector.
What has changed in recent years and could influence the way forward, says Beigbeder, is the ability to bring experts and business together.
“The key will be our ability as a region to build on the cooperation between the scientific and industrial worlds,” he says. “Business and entrepreneurship are no longer seen as dirty words by the scientific and academic communities; instead they’re gaining traction as ways to advance research further.”
France this week is set to join the ranks of governments that have crafted multi-year strategies to support quantum research.
While not handing out massive amounts of money, President Emmanuel Macron’s government is looking at how it can help boost coordination, to better intertwine research and business efforts.
There’s a slot scheduled on the French national assembly’s agenda on Thursday to discuss the matter.
Beigbeder’s fund, which launched a little over a year ago, has €5m in assets and is aiming to close its first round at €20m by spring 2020, typically invests small tickets in very early-stage projects. Part of the deal is that Audacia will help spot the right candidates to craft a management team with the right dosage of scientists and people with a business background.
Beigbeder teamed up with a quantum physicist — his associate and cofounder Christophe Jurczak — and spends a lot of time in labs spotting talent.
“This industry is still in its pre-adolescence and valuations are low,” Beigbeder says. “Maybe the perfect quantum computer is 20, or even 50 years away, but meanwhile there are applications coming out of imperfect iterations, and we want in on that market.”