(FinanceYahoo) The CIA’s In-Q-Tel was joined by Paladin Capital Group, which backs innovative tech companies, in Sandbox AQ’s first round of fundraising. The round — which was oversubscribed — has garnered “well into the nine figures,” Sandbox AQ Chief Executive Officer Jack Hidary said in an interview. IQT-summarizes the announcement below.
Founded in 2016, Sandbox AQ was spun off from Alphabet Inc.’s Google earlier this month and is chaired by Eric Schmidt, the search giant’s former CEO. Instead of making a quantum computer of its own, Sandbox AQ seeks to develop software architecture that can replace existing cryptography with complex new algorithms that are deemed impossible to crack by quantum computers, a nascent technology that isn’t yet operationally viable.
Steve Bowsher, president of In-Q-Tel, said the aim of the equity stake was to develop new encryption software that could resist the prospect of code-cracking by emergent quantum computing, as well as quantum sensors and other products.
“We want them to be able to sell into the U.S. government,” Bowsher said in an interview. He added the venture firm had spent the past few weeks introducing Sandbox AQ’s work to some of the eight U.S. intelligence agencies that it works with, which include the National Security Agency, Federal Bureau of Investigation and CIA.
Paladin Capital Chief Investment Officer Chris Steed predicted Sandbox AQ could come to dominate a market that would be worth tens of billions of dollars. Industry analysts IQT Research estimated last year the market for post-quantum cryptography will grow to $2.3 billion by 2026 and $7.6 billion by 2030.
Sandra K. Helsel, Ph.D. has been researching and reporting on frontier technologies since 1990. She has her Ph.D. from the University of Arizona.