IQM just raised €39M — “We want to deliver our first commercial quantum computer in 2021”
The Finnish quantum computing company IQM has just raised €39 million in Series A funding — . The fast-growing startup has already managed to recruit some of the best talent in this niche market, and today, they already have one of the world’s largest quantum hardware team. Maki.vc team sat down with IQM Chief Scientist Mikko Möttönen and CEO Jan Goetz to discuss milestones, working towards greater good, and how delivering the first commercial quantum computer might happen already in 2021.
What have been your biggest milestones after the initial seed round in 2019?
Mikko Möttönen: First and foremost we have been constantly able to hire new people at an accelerating pace. It was not long ago that we only had one employee, and now we are at about 70 professionals. That’s pretty great since quantum engineering experts are probably one of the industry’s scarcest resources. In terms of our product, we’ve managed to achieve very high-quality qubits, which is a sign that our technology roadmap is in good shape.
The establishment of IQM Germany was another major milestone: we are no longer only in Finland, which is an important step on our track to operate both on the European and on the global scale.
Jan Goetz: Yes, opening our subsidiary in Munich is a big thing, we’re employing close to twenty people there. In the beginning, we were focusing a lot on the hardware of the quantum computer components, but now we have a more holistic approach to our business: our thinking starts from the use case and the application of the technology. I think we have managed to formulate a much stronger strategy, which we call the co-design of the quantum computer. That is what we now do between our Finnish and German entities — in Munich we’re thinking more about the application and the use cases to solve real-world problems, and the implementation is done here in Espoo.
“In many startups, people are talking about scaling and bringing the content of the quantum computers to cloud services — but that is taking the second step before the first one. First, you need to build real machines that work and can solve problems.”
What about in terms of commercialization?
JG: On the technological side, we have moved our labs into a professional data center that can host from ten to twenty quantum computers. We have built the first working prototypes and taken them into operation, which basically means setting up the whole production from configuration to integration and the control of the software.
From a commercial point of view, in just 15 months or so we have managed to develop a very creative business model that goes beyond the typical business models you see in other startups. In many startups, people are talking about scaling and bringing the content of the quantum computers to cloud services — but that is taking the second step before the first one. First, you need to build real machines that work and can solve problems. That’s why before talking about scaling, we are focusing on selling our quantum-computing systems to research and supercomputing centers, where there is already a significant market.
Tell me about your research & development — what has been the biggest challenge and breakthrough?
MM: We started on a very good basis as we have had very skilled people on board from early on. But as we’re moving at a fast pace, organizing everything is a huge challenge. At IQM, we employ engineers with a wide variety of skills, so it has required special attention to orchestrate all of them to work towards the same goal.
The fact that we do not have all the time in the world to work on our product is also challenging. We have to be fast, which means that everybody is busy all the time. That can really mess with the work-life balance, so we have invested in building the right company culture, hired people experts and have built a vibrant company culture, together with our employees.
One thing that affects the pace is that we want to become the leading quantum-computer company in the world, and the faster we can do it, the more likely it is that we succeed. There are obviously other companies building quantum computers, too, which is a good thing, because competition speeds things up — and society really needs quantum computers now.
In terms of breakthroughs, there have been quite a few interesting leaps, but not everything is public yet. A recent hit was developing with the help of our academic collaborators a new detector, a so-called bolometer for measuring energy quanta at unprecedented resolution. The findings were published in Nature in September. Bolometers can now be used to measure qubit energy since our detector is fast and sensitive enough for the job.
All this seems amazing given our company’s young age.
We’re not going to the streets to give out flyers and telling people to buy quantum computers.
How have you worked on a commercialization strategy?
MM: As Jan already mentioned, there are a number of quantum computing cloud services available. It’s very nice from an educational point of view since that makes quantum computers accessible for people around the world and lets them play around with the machines and learn how to program them. But from a research point of view, it is important to go the extra mile and to get the quantum computer on your premises. Then you will not only learn how to program it but also how to improve the technology — there are plenty of more research and education possibilities if you have the machine physically.
That’s why we’re currently and primarily taking orders of quantum computers that are delivered to the customers. Cloud is on our roadmap, but not a short-term focus. There are a lot of companies that won’t or can’t send their data to the cloud: there might be health data or some other heavily regulated data that needs to be kept in high confidence. In these situations, the solution is to order a quantum computer from IQM that can be delivered directly to their basement where they are free to experiment with it.
Before reaching quantum advantage, i.e. the moment when a quantum computer can solve problems of practical value faster, cheaper, or more accurately than a classical computer, these machines are mostly used for educational and research purposes. These are fields where governments play a big role, which means it’s governmental money we are using here. That also has an effect on how we have to adjust our marketing because we’re not going to the streets to give out flyers and telling people to buy quantum computers. Instead, it’s talking to different government bodies and explaining to them how great an advantage it is to have a quantum computer, and how great a tool it is to boost your own ecosystem. We work with public agencies and decision makers to build a vibrant quantum ecosystem in that country and the region.
“We have a culture that is in a sense based on Finnish values: equality, sustainability, and non-discrimination.”
What kind of partners and investors have you aimed to have onboard and why?
MM: With long-term focus. We’re interested in partnering with companies and people who can build certain components that we can test and utilize in our machines. This includes software and algorithm companies: let’s say there’s software company A who has customers X, Y, and Z who are interested in buying the service of the software company. Company A still needs someone to build the hardware to run the algorithm, and that’s where we can offer our services.
I think we were very lucky to get all the investors onboard in the seed round since all of them have been helping us a lot with their networks and their own niche expertises. They have all helped us succeed, and now that the company is getting bigger the scale also changes.
We are looking for strategic investors who believe in the quantum future. It’s not only for the money but for the connections, too: investors with links to certain organizations or companies that could have use for quantum hardware or have connections to potential technologies.
What is IQM the world’s best at?
MM: We have the best team in the world. We like to differentiate from other companies with our attitude, which is about the will to help the world with our technology. We are quite agile, still less than a hundred people in the company, and we have a culture that is in a sense based on Finnish values: equality, sustainability, and non-discrimination.
“I always say that quantum computing is like electricity — you can imagine what advantages electricity has brought us, and electricity will always be in use.”
Everything started with the will to build the quantum computer. We want everybody to have the capability to help their countries and societies by having a quantum computer. Most leaps on the wellbeing of people are based on technological breakthroughs, and we see that quantum computers can be used in so many different fields to do things that are otherwise impossible. I always say that quantum computing is like electricity — you can imagine what advantages electricity has brought us, and electricity will always be in use. It’s the same with future quantum computers. Once we have working machines they will be developed further seemingly forever and will always stay there to help us in different ways.
How did you manage to attract your current team?
MM: When we raised the seed fund we had only hired one person, but we had already talked to a lot of people. We were amazed by how many were interested in joining the company, and from all of those who said they would join, all but one have joined IQM. I think because we got such a high-quality team together very quickly, it made us look credible in the eyes of other potential hires. We’ve been looking for talent globally, and these days there are at least 16 different nationalities in our team.
Of course, there are not that many jobs in Europe for people in quantum mechanics where you could use your skills on a full scale. You can use your analytical and mathematical skills in banks or insurance companies, but IQM is a unique opportunity for many who want to work in physics, and towards the common goal of helping society to achieve something great.
We think quantum computers are going to be a big thing, but at the same time, we don’t want to make promises that we cannot keep. We want to be very honest about the risks, too. That’s why I can’t promise you that next year we’ll have a quantum advantage. It’s easy to hype, hype, and hype, but in case the experts we want to hire don’t believe what we’re saying, they won’t want to come and work for us. I think the combination of honesty and excitement has made us a very attractive place to work.
What makes your team strong? What kind of organization are you building?
JG: It’s the quality and diversity of the people. We have been able to hire the world’s best people, starting from Enrique Solano in Germany, who is a world-leading professor who has been shaping the industry from the very beginning. Then there are the rising stars, young scientists who already have a professor title but still have wanted to join the startup world. Our management team is also very experienced and talented: we have professionals who have worked in big companies such as Nokia and Microsoft for years.
We have advisors all around the world, in the US and Asia as well, so the mindset is to think big and think global — but always with a solid plan behind. We are not going to Silicon Valley just because “everyone has to go to Silicon Valley”. Instead, we are making a very detailed evaluation of possible places to scale globally: where’s the best talent, the best technology, and the most significant markets.
“There’s also the question of technology sovereignty: which countries or blocks of the world have direct access to the technology.”
MM: Well, it looks like we’re building a multinational giant. It would of course be great for both Finland and Europe to have not only another unicorn but something much bigger on a global scale.
You have attracted investors from Europe to China and the US, what really got them interested?
MM: You have to tick all the boxes. First, it’s very important to have the background knowledge, skills, and IP. As IQM is a spinout from Aalto University and VTT, we had been developing this technology at the university for many years. “Do you have patents” is usually one of the first questions we get from investors.
Then there’s the team. Our founding team is very skilled, and we had very early on talked to a number of more professionals who had said they’ll join us if we get funding. There’s also the strong environment supporting the company, and our willingness to help the society instead of looking for personal benefits.
The plan of what IQM is going to do is important. It has to be possible to create something that is high risk but also an extremely high return if we succeed. That amazing spectrum of opportunities we can open has been the key.
Also, the market had already started to evolve. We were not the first quantum computer company — if we had been the first we would have been there too early. We’ve been growing the company for a little over a year and have reached a credible size, and now there’s an actual demand for quantum computers. That means we haven’t spent all the investor money yet and the time is right for selling the machines to customers.
“For us, it has always been important to value our European roots.”
JG: I think quantum computing is a completely disruptive technology that can change the world, and it will disrupt all the industries that we know. It will probably also create new industries since it’s a global phenomenon not tied to specific markets.
But there’s also the question of technology sovereignty: which countries or blocks of the world have direct access to the technology. For us, it has always been important to value our European roots. Still, we think the horizon does not end at the Atlantic or somewhere on the Eastern side of us. Instead, we see our business as global, which is why we want to be connected to the US and Asia as well. The funding we raise is the bridge to markets that allow us to accelerate our business possibilities.
What are the next major milestones we can expect from IQM in the upcoming years?
MM: Quantitative targets aside, we would like to be recognized as a great place to work globally and as fantastic ecosystem enablers. Other targets include, scaling the company to a 100 employees milestone next year. We also want to deliver our first commercial machine in 2021. We’re ramping up our computers and making them larger and higher quality. Further on, we are looking into achieving quantum supremacy and quantum advantage. We also see there are many supercomputer centers, mainly researchers but also commercial, who see quantum computers as a natural evolution from classical supercomputers. We would like to be the engine that helps this kind of development, to enable this kind of super-quantum-computer centers to exist.
JG: I think we are very close to quantum advantage. Once we reach it we can sell quantum computers that provide business value. This gives a whole new aspect to the development of IQM, where we really can start commercialization from a completely new angle. Keep watching this space!