Quantum computing (2022)
The European startups lining up a quantum leap
Last updated: 13 Jan 2022
Market 101
Basics
Classical computers use binary “bits” that exist either as 0 or 1 to encode information. Quantum computers instead use infinitely small quantum bits — qubits — which can be 0 or 1 at the same time. This allows them to simultaneously consider a much larger number of possible combinations than classical computers can, and therefore calculate outcomes at much faster speeds.
101
For years, “quantum supremacy” was the holy grail that labs around the world were striving towards as they tried to produce a quantum computer that would be able to solve problems a traditional computer could not. After teams at Google and China’s University of Science and Technology demonstrated quantum supremacy (in fairly specific and theoretical situations) in 2019 and 2021, the goal posts have moved to demonstrating “quantum advantage”, with a focus on solving problems in a practical application. Though it may still be a long while until then, the timelines are now clearer than ever.
This is fuelling cautious excitement in quantum startups — combined with the fact that in this nascent industry, breakthroughs can come in unexpected places. American giants may have the biggest quantum computers with the most qubits, but startups are betting that any of them could discover higher quality qubits that are more reliable and easier to scale. Their pitch to investors is ultimate risk with ultimate reward, in a sector where there’s all to play for.
Early stage market map
Key facts
€400-750bn
projected value created through quantum computing in the next 15- 30 years1
28
% of large companies with quantum aspirations that plan to invest more than $1m in the technology2
20 seconds
speed at which a photon-based quantum system calculated what would take a supercomputer 600m years, in a show of quantum supremacy at China’s University of Science and Technology
Trends to watch
1. The money tree
→ Quantum-as-a-service allows startups to collect revenues and clients to reap the benefits of quantum technology before the industry reaches quantum advantage.
→ Startups are collaborating with the American tech giants dominating the subsector, or going it alone by offering quantum software services for specific use cases.
2. Cutting through the noise
→ Today’s quantum computers can perform calculations stably for only a few seconds before qubits encounter errors and break down, limiting their utility.
→ Some startups are trying to develop error-tolerant quantum computers, while others are designing hardware with a specific application in mind, requiring less complex algorithms and leading to fewer errors.
3. The winning technology
→ There are many competing types of qubits being developed. Superconducting qubits are the most advanced in their development,but other qubits are based on photonics, trapped ions and neutral atoms.
→ One of these could emerge as the ultimate winner, sweeping away the rest, but in the medium term at least it’s more likely that multiple types of quantum computer will coexist, with different machines suited to particular types of applications.
4. Scaling quantum computers
→ According to scientists, quantum computers need at least 1000 qubits to be commercially useful, a goal that IBM aims to reach by 2023. Today’s biggest machines have just over 100.
→ The answer may lie not only in scaling up individual quantum computers, but linking them to each other to create networks of computing power using quantum modems, for example.
Startups tracked by Sifted
Sifted take
While the US and China might have dominated on the hardware so far, Europe still has every possibility of leapfrogging them with a breakthrough. And in any case, as in classical computing, some of the biggest opportunities could come from quantum software, where the market is still wide open. The key to success right now is companies securing the best teams — the race for talent is going to dominate the industry in the next year.
Rising stars
Is developing a modem to link different quantum processors together, thereby addressing the scaling challenges of quantum computing. The startup hopes to be the first to commercialise its quantum modem and expects to start tests with customers within two years.
Round
Seed
Valuation
€10m
Date
2021
Size
€2m
Multiverse Computing SL
Quantum software
Applications (finance)
Total funding
€11.5m
Has developed quantum software that reportedly speeds up banking operations like portfolio optimisation and fraud detection by 100x. The company matches algorithms with a specific quantum computer best suited to a given problem. Clients include Caixa Bank, the Bank of Canada and Spanish bank BBVA.
Round
Seed
Valuation
€34.5m
Date
2021
Size
€10m
Has developed a prototype for the first “fault-tolerant” quantum computer, which reportedly reduces the number of errors by 300x by automating corrections. Drawing on the expertise of a consortium of French universities and research institutes, the company aims to develop a fully operational quantum computer within five years.
Round
Seed
Valuation
€18m
Date
2020
Size
€3m
Early stage startups to watch
Aegiq
Components & materials
€4.2m
€2.2m
-
Alice&Bob
Quantum hardware
Computing
€30m
€3m
-
Beit.tech
Quantum software
Applications (various)
€1.3m
€1.3m
-
ChemAlive
Quantum software
Applications (pharma)
€630k
€600k
-
ColibrITD
Quantum software
Applications (various)
€300k
-
-
Crypto Quantique
IoT security
€11m
€3.7m
€17.5m
HQS Quantum Simulations
Quantum software
Applications (pharma)
€2.3m
€2.3m
-
Kuano
Quantum software
Applications (pharma)
€3.7m
€1.2m
-
Miraex
Quantum hardware
Quantum internet
€10m
€3.8m
-
Molecular Quantum Solutions
Quantum software
Applications (pharma)
€211k
€27k
€180k
Multiverse Computing SL
Quantum software,Fintech
Applications (finance)
€11.5m
€10m
-
Nu Quantum Ltd
Quantum hardware
Quantum internet
€3.3m
€2.5m
-
ORCA Computing
Quantum hardware
Computing
€3.5m
€3.5m
€16m
Oxford Ionics
Quantum hardware
Computing
-
€3.2m
-
Pharmacelera
Quantum software
Applications (pharma)
€1.3m
€960k
-
Phasecraft
Quantum software
Applications (various)
€5.3m
€4.4m
-
PQShield
Security,Enterprise Software
€24.6m
€18.2m
-
Qblox
Quantum hardware
Components & materials
€5m
-
-
QphoX
Quantum hardware
Quantum internet
€2m
€2m
€10m
Quantastica
Quantum software
Applications (various)
€200k
€200k
€1m
QuantWare
Quantum hardware
Components & materials
€1.1m
€1.1m
-
Qubit Pharmaceuticals SAS
Quantum software
Applications (pharma)
€4m
€1.3m
-
Sparrow Quantum
Quantum hardware
Components & materials
€1m
€1m
-
Universal Quantum
Quantum hardware
Computing
€4m
€4m
-
Europe’s success stories
Who early stage startups are up against
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
→ Focuses on encryption and security matters in quantum computing
→ Went public via a SPAC at a $1.4bn valuation last year
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
→ Aims to build Finland’s first commercial 54-qubit superconducting quantum computer by 2024 (the company debuted a five-qubit machine in November)
→ Has raised the most ($118m) of all private quantum computing companies in Europe
Sources
Research reports
1 The Path to Building Quantum Advantage | July 2021 | BCG
News articles
2 Dozens of companies budget $1m+ for quantum computing as tech race intensifies | January 2022 | Sifted
Quantum computing's wiring problem solved by microwave device | December 2021 | Sifted
Quantum algorithms that speed up banking operations 100x are here | October 2021 | Sifted
VCs make record bets on quantum computing | September 2021 | PitchBook
European startups want to unleash the power of quantum computing as early as this decade | June 2021 | 1E9
The widely anticipated quantum internet breakthrough is finally here | May 2021 | Sifted
Why investors love quantum-as-a-service | March 2021 | Sifted
Why now is the right time to invest in European quantum computing | March 2021 | Sifted
11 European quantum computing companies to watch | March 2021 | Sifted
Path to European quantum unicorns | February 2021 | EPJ Quantum Technology
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