Thirteen corporates invested a total of $1.31bn in quantum computing start-ups in 2021. That is a 68% rise from 2020. But is this nascent sector ready to see even bigger corporate cheques?  

No longer pigeon-holed as an obscure part of the IT sector, quantum computing is going mainstream.

“Quantum computing could have benefits across industries including pharmaceuticals, renewable energy development, finance and manufacturing,” says Alessandro Curioni, vice president, Europe and Africa and director at IBM Research Europe.  

An increasing number of companies are willing to explore what the benefits are of quantum computing technology, which harnesses the laws of quantum mechanics to solve problems too complex for classical computers.     

Corporations such as Amazon, Google, IBM and Honeywell have invested in quantum computing for some time, but now companies such as the aerospace company Airbus and the US multinational bank Citi Group are contributing to quantum investment.  

Sumitomo Corp, HSBC and Samsung, for example, took part in a $33m series B funding round in May 2022 for Classiq, an Israel-based software development company.  

“Quantum computing had the potential to help Samsung develop better materials for the semiconductor, display and battery businesses and could help manage the global logistics of the company’s mobile phone, TV, and home appliance businesses units,” says a Samsung Catalyst Fund spokesperson.   

HPC Systems, the system integrator of high-performance computing solutions, and Zeon Corporation, the chemicals manufacturer, backed a $10m series B round of QunaSys, the Japanese quantum algorithm developer, in March.  

Investment has grown sharply in the past few years, from just $87m in 2018 to $1.31bn last year. Investment this year has been more muted, however, with just $176m committed so far.   

Quantum computing is still a highly nascent sector, with no clarity yet on which type of quantum computer is likely to dominate.

Are investors getting cold feet?    

Uncertain partnerships  

Quantum computing startups can sometimes be unsure whether they should take corporate funding.   

“In the early days of a company’s inception, there are more cons than pros, as corporates can influence the given business and product,” says Vishal Chatrath, co-founder and chief executive of Quantrolox, an early-stage UK quantum control software company.      

“A young company must be careful not to become too influenced by the needs of a single, dominant corporate investor,” he says. Quantrolox initially held back from seeking direct corporate funding for this reason.    

“However, once a quantum computing startup is more established, there can be many benefits to working with a corporate investor,” Chatrath says. The opportunity to test out quantum software on corporate-owned quantum computers, for example, is a big draw.    

The company’s automated software aims to ease the “tuning” of quantum computers to ensure they run faster. The company intends to move beyond testing university and academic models and use the devices that corporations will have available soon.   

“Many corporates may have a bank of 100 or more quantum computers, and if our software is successful, that corporate accessibility will enable us to deploy our product onto these machines,” Chatrath says.     

The Oxford University spinout recently announced a $1.6m closure of its seed round led by Nielsen Ventures, the venture capital arm of media enterprise Nielsen, and early-stage technology venture capital firm Hoxton Ventures.    

A long-term view  

“The easiest investor to start a conversation with is low-level venture capital firms,” rather than corporates, says Matt Johnson, CEO of QC Ware, a quantum-computing-as-a-service company, which serves the pharmaceutical, materials and financial industries.  

However, corporate investors are useful for an early-stage sector like this, because they can take a longer-term view than financial VCs. Financial VCs will usually want a return in 7-10 years.  

“Corporate venture capitals are fascinating as they have to consider the long-term strategic view of quantum computers inside their corporation,” says Johnson. “Therefore, it makes sense for quantum computing startups to form a strong relationship with corporates before formulating a deal.”  

Johnson helps organise the Q2B conference, the largest quantum computing conference in the world, where companies track the developments of quantum developments. He is also a member of the steering committee for the US-based Quantum Economic Development Consortium.  

“Most of our investors are in fact corporates. Our relationship with these companies is one where we benefit from each other,” says Johnson. “They want to hire us as a software vendor, which explains their initial investment. But they serve as both a customer and development partner to us.”   

In 2021, the company raised $25m in a series B financing led by Koch Disruptive Technologies, the corporate arm of the US multinational conglomerate Koch Industries. Other listed corporate participants include materials developer Covestro, Samsung, and Citi Group. 

Should corporations invest in hardware or software?   

So far, there has been an imbalance in corporate investment between software and hardware companies. Between 2019 and 2021, 14 corporate deals, worth an estimated $1.1bn, were in the quantum software sector while there were 11 quantum hardware deals worth $11.5bn in the same period, making the value of the hardware deals ten times the value of the software ones. 

QC Ware’s Johnson believes, however, that the tide will turn towards more software deals in the future.     

Says Johnson: “Because corporations interact with quantum computing mainly through software, and the software layer, there is more of an incentive and business benefit in directing financing to these start-ups.”   


Roshini Bains

Roshini Bains is the junior news reporter for Global Corporate Venturing and Global University Venturing.