Kiltz of Unternehmertum Venture Capital Partners Examines The European Quantum Computing Startup Landscape
(Medium) Alex Kiltz of Unternehmertum Venture Capital Partners examines the European quantum computing startup landscape in an extensive must-read article to those interested in the European quantum tech sector. Kiltz sets the stage for his discussion describing the basics and applications.
Kiltz answers the following questions:
What are the recent developments in quantum science?
What are the leading research institutes for quantum technologies across Europe?
What does the current startup activity in quantum technologies look like?
Which are the different funding mechanisms that are available for startups in the field?
How do funding levels differ across categories and countries?
What are the most attractive market segments from a VC point of view?
Data sources such as Crunchbase, Tracxn, company announcements, and press releases as well as UVC Partners’ deal flow were used. For funding levels, only publicly available equity funding data (i.e. no public grants) was considered. The startups were selected according to the following criteria: founded after 2010 and headquartered in Europe (including Israel, Russia, and Turkey). Over 270 startups were initially identified and 69 qualified according to the described criteria.
The 69 European quantum computing startups that were founded since 2010 raised a total of just over €150m to date. Only one exit was recorded, albeit from a company founded in 2001: ID Quantique was acquired by SK Telecom for €55m in 2018.
When looking at the geographical spread of startups across Europe, the UK leads the scoreboard with 23 startups followed by Germany (13), France (7), Spain and Switzerland (4 each), and Finland and The Netherlands (3 each). As expected, three cities from the UK are among the top five cities in terms of the number of startups: London (8), Cambridge (3), and Oxford (2). Three startups in our sample are from Berlin. Barcelona, Helsinki, Innsbruck, Lausanne, and Munich are home to two startups each.
Hardware — Computing
Definition: startups that are developing hardware products specifically dedicated to the computing function of quantum computers
Number of startups: 12
Total funding: €42.1m
Most funded company: IQM (Espoo, Finland), €26.5m
Examples: IQM, and Quantum Motion Technologies
Hardware — Components & Materials
Definition: startups that are working on peripheral technologies of quantum computers such as cryogenics
Number of startups: 13
Total funding: €5.5m
Most funded company: Nu Quantum (Cambridge, UK), €3.1m
Examples: kiutra, and Nu Quantum
Software — Operating Systems
Definition: startups that are developing quantum operating systems, compilers, and quantum programming languages and tools
Number of startups: 5
Total funding: €23.4m
Most funded company: Quantum Machines (Tel Aviv, Israel), €19.5m
Examples: Quantum Machines, and Riverlane
Software — Applications
Application software startups are further grouped in three subgroups: Security & Encryption (19 startups, €19.6m total funding), Chemistry & Pharma (11 startups, €48.7m total funding), and Other application software startups (9 startups, €11.3m total funding).
The number of quantum computing startup investments (i.e. funding rounds) in Europe increased in the last few years and was on par with North America in the last two years, the venture capital funding volume flowing into quantum computing startups in North America is still a magnitude higher. Over this nine-year timeframe, North American startups in this segment raised over €1bn compared to €136m raised by their European counterparts. In other words, on average, a quantum computing startup in the US receives almost 5x the funding its European counterpart receives