Quantum Exponential: building a cutting edge quantum technology … – The Armchair Trader

By 2027 over $16bn will be invested in quantum computing. That compares with less than $5bn today. Quantum technology has the scope to be a global game changer in the world of technology, perhaps on a par with artificial intelligence.

Quantum technology is currently experiencing something of an arms race, as it is seen as a critical enabler for future industries. It leverages the laws of quantum mechanics to produce exponentially higher performance for certain types of calculations. It offers the possibility for major technology breakthroughs across a number of end markets.

Quantum Exponential [AQUIS:OBIT] is a London-listed company that invests in a portfolio of private opportunities within the quantum computing space. The company anticipates it will generate the majority of its revenue from M&A deals in the sector, especially in the private space. It is projecting a x10 increase in the number of deals in the sector over the next five years, mainly due to academic innovation.

Quantum Exponential likes to get into deals early, usually as a Series A or Series B investor and has carved out a reputation for backing companies in what is a highly specialised space. It prioritises deals with solid, underlying science which look ready to be commercialised in the near future. The objective is to create a portfolio of 8-10 cutting-edge investments which the company can harvest in years 7-10.

The companys latest deal was Oxford Quantum Circuits, which it announced in February. OQC designs unique super conducting circuits and successfully raised 38m last year as part of a Series A fund raise, the largest in this sector in the UK. OQC is regarded as one of the leading quantum computing companies in Europe, making its computers available via private cloud and Amazon Braket.

The deal in this case was co-led by Lansdowne Partners, a heavyweight in the European venture capital space.

Leading the team at Quantum Exponential is Steven Metcalfe, who has 30 years of experience in the world of capital markets. The CIO is Stuart Nicol, who has led UK venture teams for more than 20 years and has a number of big VC deals under his belt.

The investment team includes investment manager Anthony Lyall who is a family office investor, backed up the technical expertise of Dr Oliver Cohen (PhD in Quantum Physics from the University of London). Sourcing of new deals is considered to be incredibly important in this area, and there is stress on maintaining the right networks within the academic community to be able to identify future winners.

It should be stressed that quantum technology is not just about quantum computing, although this is important. It also has applications in higher performance measurement and application in areas like imaging and underground mapping. Another use area is secure communications e.g. unhackable encryption keys.

Quantum Exponential has made investments across all of these areas. It does not back pie in the sky companies; there is considerable focus on revenue generation and some of its companies are already signing revenue earning contracts or nearing large scale production.

Given that so many of the companies in the sector are at a very early stage, by necessity they can really only be accessed by private investors through venture capital specialists, in this case with a very focused listed opportunity.

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Quantum Exponential: building a cutting edge quantum technology ... - The Armchair Trader