Israeli startup Quantum Machines has raised $50 million in a Series B round of funding, bringing its total funding to date to $73 million.
The latest round was led by Red Dot Capital Partners with the participation of Exor, Claridge Israel, Samsung NEXT, Valor Equity Partners, Atreides Management LP, and joined by TLV Partners, Battery Ventures, Altshuler Shaham as well as other existing investors.
“Quantum computing does not promise us better computing. It promises impossible computing,”– Dr. Itamar Sivan, CEO, Quantum Machines
Impossible computing has attracted last year $365 million in VC funding, entrepreneurs launching new startups, and increased investment in quantum computing products and services by established companies. A number of participants in the race to achieve impossible computing focus on developing hardware, measuring their position in the race by the number of high-quality quantum bits (qbits) their devices achieve. These include IBM, Google, Intel, Honeywell, Rigetti Computing, and D-Wave Systems. Other market participants—for example Microsoft, Baidu, and 1Qbit—focus on developing quantum algorithms and specialized programming languages. Among existing cloud computing providers, Amazon, in addition to IBM, Microsoft, and Google, provide specific quantum computing services. A handful of startups, including Quantum Machines, focus on the management and control of current and future quantum systems.
The average VC deal size for quantum computing startups in 2020 was just under $10 million, so the $50 million Quantum Machines has raised may indicate a new phase in VC assessment of the state of this emerging technology. It is also the largest round of investment ever in a quantum company not focused on building a quantum computer but on developing the infrastructure to support all types and brands of quantum computers.
Other early indicators this year of a more mature quantum computing market were the announcement of what will become the first pure-play publicly traded quantum computing stock, after startup IonQ completes a merger with special purpose acquisition corporation (SPAC) dMY Technology; and the announcement of the formation of a new company, combining Honeywell Quantum Solutions (HQS) with startup Cambridge Quantum (CQ), with Honeywell as the majority shareholder of the new company.
The new phase in the evolution of the quantum computing industry is evident also in increasing investments in proof-of-concept projects by corporations worldwide. Quantum Machines has seen major growth over the past 12 months, tripling its interdisciplinary team of physicists and engineers based in Israel, France, Germany, Canada, and the United States.
“Quantum technology is approaching the mainstream,” declared an article in the July issue of the Harvard Business Review. “The opportunity for quantum computing to solve large scale combinatorics problems faster and cheaper has encouraged billions of dollars of investment in recent years.” Today’s news from Quantum Machines is yet another indicator that we are going to see many more billions of dollars invested in quantum computing in the near future.
The funding will allow QM to help implement an “effective cloud infrastructure for quantum computers.”