Investment into European quantum computing startups is booming. According to data from Dealroom, they raised over $290m in 2022, almost double their total from the previous year. And this year could be a whole lot bigger.
While companies like IQM (one of Europe’s largest quantum startups) focus on developing the hardware for quantum computers, others are focusing on making the technology accessible to businesses.
Quantum-as-a-service startups give clients access to quantum computing, often through cloud services. And their popularity has taken off fast.
“Two years ago they didn’t know where to even get started with quantum computing. Now we see more and more companies with existing quantum experience in-house,” says Ilana Wisby, CEO of Oxford Quantum Circuits — the first startup to offer cloud access to its quantum computers in Europe through Amazon Web Services.
Quantum computers are still in early stages of development — the largest quantum processors just have a few hundred qubits (the quantum equivalent of a classical computer bit) and the technology is still prone to calculation errors. But that isn’t deterring big players from using the technology now.
“Quantum computing is inevitable, and people know it will impact their businesses. They want to be ready and have a first-mover advantage when more powerful quantum computing hardware becomes available,” Wisby says.
So what can quantum computers actually do?
The quantum computers that exist today have limited capacity, but they’re already being put to use to help companies with some of the biggest problems they face.
Finance is one of the biggest applications for quantum computing. Experts are hoping that the technology can optimise investment portfolios and boost returns by millions.
👉 Read: The different types of quantum computer startups, explained
Swiss company Terra Quantum has developed quantum algorithms that can optimise portfolios of collateral investments. Compared to classical approaches, the algorithm was 10 times faster and improved the portfolio’s performance by six basis points — for a European bank posting €400bn in collateral, that would translate to a return around €240m a year better, says Terra Quantum’s CEO Markus Pflitsch.
“The mainstream narrative is that quantum will only be disruptive in the future,” Pflitsch tells Sifted. “But we are already in a position to tackle meaningful use cases today.”
Like many other quantum providers, Terra Quantum uses a hybrid approach that combines quantum and classical algorithms to make the most of what each type of computer is best at doing. This allows the company to get faster, more accurate results than using just classical computers.
Quantum algorithms are particularly good at optimisation problems. For example, Terra Quantum is working on a pilot programme helping a logistics company optimise the routes of fleets comprising thousands of trucks — which may be able to significantly reduce CO2 emissions.
“Logistics, aerospace, energy companies… all industries require solutions for large optimisation problems,” says Marta Estarellas, senior quantum engineer at Qilimanjaro, a Spanish quantum-as-a-service startup.
Classical computers take too long to solve these problems, meaning that companies often have to settle for simplifying their optimisation problems and obtaining less accurate results. “With a quantum computer the solution is exact, not an approximation,” Estarellas tells Sifted.
Another application of quantum computing is “predictive maintenance” — Spanish quantum startup Multiverse Computing has been working with Bosch to predict where supply chains are going to fail and optimise when and where maintenance is needed. The company is also using this approach to help a hospital in Barcelona predict which patients are going to require attention in the next 20 minutes and optimise the use of its ICU beds.
To democratise access to quantum computing, Multiverse Computing has developed a platform called Singularity that can perform quantum computations from a spreadsheet, says CEO Enrique Lizaso.
“If you are a financial analyst, you want to use this tool without having to learn about quantum computing, pay for a quantum computer or allocate any extra time or resources to it,” he tells Sifted.
Quantum computing can also increase the efficiency of machine learning algorithms and significantly reduce the massive amounts of energy they require to sort through data. According to Lizaso, quantum computing has the potential to run machine learning algorithms with 25 times less electricity.
Getting ready for a quantum future
While quantum computing is already delivering results for businesses, its full potential will be unlocked as the developers of quantum computing hardware overcome the current limitations that the technology faces.
Right now, many of the companies offering quantum-as-a-service use classical computers to simulate quantum computers. This is only possible for a small number of qubits and helps them get around the high rates of computation errors that come with the hardware we have available nowadays.
By 2026, quantum computers will be able to perform tasks that classical computers just can’t, says Wisby. Some of these applications include large optimisation problems that would take thousands of years for a classical computer to solve as well as simulating molecules — which could be a huge boost for the pharma industry and shorten the time it takes to develop a drug by several years.
To get there quantum computers will have to be seamlessly integrated with classical computers — Oxford Quantum Computers is already working to deploy its first quantum computers at high-security data centres.
So why use the technology now? Companies around the world are racing to set up quantum computing capabilities to be ready for the moment that a breakthrough in quantum computing allows them to access a whole new level of performance and gain first-mover advantage.
“I’d say probably 5% of each industry’s companies are leaning into quantum computing and have their own team of experts,” says Tony Uttley, CEO of Quantinuum — a provider of quantum solutions that was founded last year from the merger of Cambridge Quantum and Honeywell Quantum Solutions.
He estimates that another 20% of companies are dipping their toes in with the help of quantum-as-a-service providers, while the rest are waiting to see what happens. But those who get there first may get a bigger share of the prize.
This isn’t some future tech 10 years away from now, it’s happening right now
Uttley points out at the example of JP Morgan, which is one of Quantinuum’s largest users. The bank has hired around 30 quantum experts and is already developing its own quantum algorithms to take advantage of the technology.
“Clients are interested in understanding how they can benefit from quantum computing,” says Víctor Canivell, CEO of Qilimanjaro. “They want to solve problems faster and more accurately than they can today, and we can help them start the migration to quantum.”
Canivell believes Europe is facing a really big opportunity. Europe has a strong history of academic research in quantum computing, but it's now up to entrepreneurs to build a thriving industry around this gamechanging technology and position Europe as a leader in the quantum race.
Clara Rodríguez Fernández is Sifted’s deeptech correspondent, based in Berlin. Follow her on LinkedIn.
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