New record looms in VC funding of quantum startups

Michel Kurek
Le Lab Quantique
Published in
10 min readSep 8, 2020


Quantum technologies are expected to have a major impact on society and the economy. The unique power of future quantum computers and the quantum internet could provide solutions to major societal challenges such as energy, health and security. We are not just in the future or the conditional.

From public funding of R&D to private ventures

A quantum race has begun all over the world. Considering the potentially disruptive nature of the products that would emerge from current research, governments have decided to invest massively in these areas, most of them with a triple challenge:

  • The sovereignty issue, with, for example, the ability to properly protect sensitive information that is currently encrypted but potentially decipherable over time by a sufficiently powerful and reliable quantum computer.
  • The technological challenge, with the desire to be at the forefront of these new fields either by capitalizing on a tradition of scientific excellence (USA, UK, Germany, France) or by developing one (China).
  • The economic issues, with the stimulation of national or regional industrial frameworks on these subjects.

For the time being, R&D is mainly carried out by the public sector in the major countries that are investing in it, but given the expected benefits, some very large private digital players (Google, Intel, Microsoft, IBM, Honeywell, Amazon, Alibaba, Baidu, etc.) have embarked on R&D programmes, particularly in the field of quantum computing.

The amounts of investments are generally difficult to assess except when they are made public by the companies’ communication departments. This was the case, for example, in 2014 when IBM announced that it was investing more than $3 billion over five years in two major R&D programs aimed at pushing back the limits of silicon chip technology by possibly exploring new parallel paths. This included, among others, the development of a quantum processor. At the end of June 2020, six years later, IBM has a fleet of 18 quantum computers. Access to this fleet is available on the Cloud, with some machines freely available (IBM Q Experience) and others reserved for IBM and members of the IBM Network.

Alongside these big names, the quantum private enterprise landscape is beginning to thicken with a few hundred startups at various stages of maturity.

Data on investments made in start-ups by private investors (individuals, investment funds, third party companies) or public funds are sometimes present in databases such as Pitchbook or Crunchbase when they are not confidential. We have been able to extract and cross-check such information for about a hundred startups. Over the 2010–2020 period, we have identified nearly 300 investment transactions of various types (seed scaling, expansion, etc.).

It was from 2012 onwards that investors began to take an interest in start-ups in the sector. The year 2017 was particularly active, with more than $300m invested, almost triple the previous year’s figure, and it was mainly in quantum computing (hardware).

Disclosed investments in Quantum Technology Startups 2010–2020

With an average of $200m per year, investment then stabilized for two years, and recently increased very sharply in the first half of 2020. During this six-month period, nearly $480m was used to finance the development of quantum startups, i.e. 58% more than in the record year 2017. As in 2017, it is once again quantum computing which concentrates the majority (80%) of financing agreements in the first half of the year.

In total, since 2012, $1.5 billion has been invested in quantum technology startups (80 listed in the database).

Nearly two-thirds of the declared investments (62.5%) were devoted to 15 companies working on the construction of quantum processors (hardware). The software part, represented by 37 firms, raised 285m$. The 12 firms working on communications $192m. Finally, 9 startups working on measurement or detection techniques based on quantum physics and 8 building basic components used by the other companies received $23m and $62m respectively.

The figure below complements this analysis of the amounts invested by the number of deals per year and sector. Their number has increased since 2015 with a strong acceleration in 2018 when many “small” investments were made. With 24 deals in the first half of 2020, it seems that the momentum of the past years has not been slowed down by the Covid-19 crisis. It is currently the software companies that benefits the most from investments while sensors and metrology are the poor relations of the sector.

Evolution of the number of financing deals since 2010

Of course, this list of startups, whose financing is known, is not exhaustive. Many are working in stealth mode or in an embryonic state. A more complete inventory of startups is available from the author upon request.

We now illustrate the location as well as the list of the startups having received an investment of more than 1m$ and the 25 most important among them. The largest are essentially in North America (PsiQuantum, D-Wave, IonQ, Rigetti).

Location of startups having received investments superior to $1m between 2010–2020 and TOP25 list (all numbers in m$)

The case of the Swiss firm ID Quantique (IDQ), the only European firm in the TOP5, is interesting. Founded in 2001 as a startup specializing in securing communications using quantum cryptography devices, it has been marketing its services and products since 2004 to companies in various sectors such as finance and government. In 2018, it came under the control of the Korean mobile phone operator SK Telecom. In May 2020, Samsung, SK and IDQ announced the launch of the first 5G mobile equipped with a Quantum Random Number Generator (QRNG) chipset, allowing users to securely use selected services by generating real random numbers that cannot be predicted (unlike pseudo random numbers generated using conventional algorithms).

Funding a broad range of Quantum Computing technologies

It is now instructive to detail the distribution of investments made in quantum computing (hardware) by type of technology used by the different startups for the construction of qubits, the information support of quantum computers.

Breakdown of investments by technology of qubit for startups working on hardware

California startup PsiQuantum, founded in 2016, plans to develop a photonic quantum processor. It alone received $293m. This explains the large share of funding for photonic architecture (36%). Photonic (or linear optical) quantum computers encode information in photons, not ions, atoms or electrons. Xanadu and ORCA Computing are developing a similar project.

The use of superconductivity for the construction of qubits mobilizes a larger number of players. Beyond the $225m invested in startups using these technologies, it is on this type of architecture that major players such as IBM, Google, Rigetti, Alibaba or even D-Wave are investing.

The purpose here is not to list the advantages and disadvantages of each of these technologies, but it is important to remember that not all qubits are equivalent. The family of superconducting qubits is itself particularly heterogeneous.

For instance, the superconducting qubits used by D-Wave have certain particularities that confine them to solving specific mathematical optimization problems. They are not used within quantum logic gate circuits as can be the case for IBM, Google or Rigetti startup computers. The D-Wave computers, marketed since 2011, fall into the category of annealing computers. The company has received $207m, or 22% of the funds allocated since 2010.

Start-ups deploying physical platforms based on trapped ions raised $88m (9%), most of which was allocated to the leader IonQ. The Austrian firm Alpine Quantum Technology (AQT), a spin-off of the University of Innsbruck, recognized for its work on these same methods, is using grants and non-dilutive financing (the last one being $11.2m in 2019). The study of trapped ions as a medium for quantum information is also widely pursued in university laboratories and the recent arrival on this niche of the giant Honeywell reflects the interest of all these different categories of players in this type of physical platform.

Australian startup Silicon Quantum Circuit (SQC), a spin-off from UNSW University, was established in 2017. It is working on the development of semiconductor-based qubits and has received $66m of investment since its creation. These promising technologies have received 8% of the investments. They are also being explored by other major players in the private sector such as Intel, as well as several research organizations such as the French CEA-Leti laboratory, which is at the forefront of European applied research.

Quite similar in principle to trapped ion technology, the use of neutral atoms is a more recent approach studied by various startups such as the French Pasqal, or the Californian Atom Computing. The ColdQuanta startup, which is collaborating with IonQ, is working on this technology in a broader framework than the development of quantum computers because it is also used in the development of ultra-sensitive measuring instruments and sensors.

Finally, it should be noted that topological qubits, on which Microsoft is working, and diamond-based qubits (NV Center) do not appear in our list of quantum computing startup funding.

It is interesting to compare the results of the 2019 survey conducted by renowned professor and entrepreneur Michele Mosca among 22 professionals in the quantum technology sector.

Ranking of opinions on the potential physical platforms for the specific purpose of realizing a quantum computer (Source: Global Risk Institute and evolutionQ Inc.)

The question was to rank physical implementations with the specific goal of achieving a digital quantum computer with 100 logical qubits (i.e. programmable with little or no physical errors) within the next 15 years.

The responses indicate a fairly general consensus that the preferred platforms are superconducting systems and trapped ions. These results are in line with the investments made with the striking exception of linear-optical quantum computers. This suggests that while the technological potential is high, the investments seem very speculative for these types of qubits.

Venture Capitalists

To conclude our overview of VC investments, we illustrate the capital links between venture capital firms and startups. We highlight the cases of Quantonation, a Paris based investment fund created in 2018 specializing in Deep Physics startups — particularly in the field of quantum technologies — which appears to be the investor with the largest number of participations in the field alongside Silicon Valley DCVC, and D-Wave, founded in 1999.

Mapping of Venture Capital (VC) investments into Quantum Startups (graph made from data from

What next ?

As such, 2020 is expected to be a record year for private investment. The global health crisis does not seem to have slowed the pace of private or public investment as the German decision to triple its budget as part of its post-COVID plan has done.

Some major ICT players then complete the investment landscape with development strategies that mix R&D and marketing, such as IBM or Google. At the same time, these players are collaborating with public laboratories, sometimes in different regions. Microsoft is close to the University of Delft in the Netherlands with which it is working on topological qubits. IBM’s “quantum” teams are geographically and probably financially close to the Swiss Federal Institute of Technology in Zurich (ETH). In China, Alibaba works hand in hand with the Chinese Academy of Sciences (CAS) and has other research laboratories elsewhere.

Ecosystems are being built. They are increasingly dynamic. The public/private, research/commercial divisions are becoming blurred or even superposed… Many startups have emerged from physics laboratory spin-offs and this is even the case in China (Quantum CTek, Origin Quantum Computing).

Geographical breakdown 222 startups (Source: Pitchbook, Crunchbase, Quantum Computing Report, company websites)

This disappearance of traditional cleavages is a striking feature of the global quantum ecosystem. This could have a very positive impact on the speed of quantum research and industrialization. But it could also exacerbate the risk of the disappearance (not to say teleportation) of individual nuggets (researchers) or entrepreneurial nuggets (startups) by the call of money. Faced with North America and China, the industrialization of research stemming from the scientific excellence of Europe (Germany, the United Kingdom, France, Austria, the Netherlands, etc.), or even local research itself, could suffer from the complexity and slowness of the public/private technology transfer process and the lack of appetite for long-term risks on the part of some local private financiers.

We have identified another empirical feature that could be a fundamental trend over the next 5 to 10 years. In recent months, platforms/networks have been developing that centralize the diversified supply of existing quantum computers: IBM Q Network, Microsoft Azur Quantum, Amazon AWS Braket.

So even if IBM offers access to its quantum computers developed on superconducting qubit technology, a user/customer of the Q Network can now also run his quantum software on the trapped ions of the AQT partner using the same programming language (IBM Qiskit). Similarly, Pasqal, a French startup developing a cold atom-based quantum processor, is collaborating with Google to provide access to its technology through Cirq, Google’s open-source framework used for the Mountain View company’s quantum computers (superconducting qubits).

The big players are therefore aware that it is necessary to diversify the offer while waiting for a leading physical qubit technology to emerge, which could indeed take several more years.

In the case of Amazon, whose ambition is not to create a quantum computer, we could even talk about the uberization of a market that is barely emerging.

Small players make their hardware available at AWS in the same way that a “vehicule for hire” driver makes his vehicle available on a platform. Will small players be able to benefit from this modus vivendi in the medium/long term?

It is highly likely that, beyond the technological advances to come, the quantum landscape will continue to evolve in the near future, but that it will strongly depend on the actions undertaken today by the various private and public players.

The Author

Michel Kurek is a member of QuantX, the association of Ecole Polytechnique alumni working in the field of Quantum technologies, materializing a strong interest for the emergence of the Quantum industry which is expected to have major repercussions on society and the economy. The unique power of future quantum computers and the quantum internet will be applicable to major societal challenges in most sectors of human activities such as energy, health and security.

He published an influential report scientific publications and patents in the field of Quantum techologies.

To learn more

The full report by Michel Kurek is to be published soon on Le Lab Quantique’s website, with full references to sources.



Michel Kurek
Le Lab Quantique

I spent more 25+ years in Finance. Innovation is part of my DNA and curious about any subject with strong technological dimension like Quantum Technologies.