Europe’s quantum sector is poised for massive growth
The European quantum computing sector is arguably the most exciting field in technology. Funding is at an all-time high and the number of quantum startups is increasing year after year. Still, the global media tends to portray the EU and UK as potential runners-up in the supposed quantum computer race.
To understand Europe’s position in the global quantum computing market, we need to turn the clock back a few years. Investors and entrepreneurs started flocking to quantum during the tech boom of COVID-19 and despite the expected decline after the pandemic, analysts predict a huge increase in market size in the next 5-15 years. However, that optimism is somewhat dampened by the fact that quantum computing is a technology that is still in its infancy.
Some scientists believe that quantum computers will never be as useful as the companies that build them hope. Still others are afraid development delays can lead to a “quantum winter” where investment and research funding stall and bring the field to a standstill. Fortunately, those views seem in the minority.
Greetings, Humanoids
Sign up for our newsletter now for a weekly roundup of our favorite AI stories delivered to your inbox.
Industry analysis and peer-reviewed research largely show that quantum computing is about to make a breakthrough in Europe, similar to the deep learning explosion that began in 2014. And it’s currently showing no signs of slowing down.
This shouldn’t be shocking news to anyone. Europe’s where quantum was born. This is not new technology being imported. It is the continuation of more than a century of work that began essentially in Germany.
The first quantum revolution began when German scientist Max Planck published his groundbreaking study on “blackbody radiation” in December 1900. A few years later, Planck would help a young Albert Einstein refine the theory of relativity that would eventually become part of the foundation of our current understanding of physics. Simply put, without European scientists there would be no quantum computing industry to speak of.
Today that industry is worth it somewhere around €500 million. The comprehensive picture, for the EU and the UK, includes public funding from almost every country in Europe, the participation of hundreds of academic institutions and the creation of over 69 quantum computing-focused startups. But before we dive into those companies and institutions, it’s important to understand Why they are invested in quantum computers.
What’s so special about quantum computers?
The basis for the optimism around the field is a concept called “quantum advantage.” The technology is expected to reach a point of development where quantum computers will be able to perform calculations and run algorithms that classical computers cannot or cannot perform in a feasible time frame. Currently, ‘quantum advantage’ is a somewhat vague term. Quantum computing is still in its infancy and there is no agreed benchmark against which one type of quantum computer can be compared with another, or with a classical supercomputer.
Because of the way quantum computers work, you can’t just measure clock speed or CPU performance to determine which system is better. Researchers usually use incredibly complex algorithms on computer systems to compare their higher skills. However, these algorithms are usually not useful for anything other than providing computers with hard-to-solve problems.
Ultimately, quantum computers are predicted to show a distinct advantage over classical computers in executing more than just complex puzzle-like algorithms. It is at this point that early-entry investors and startups begin to see a return on their investment.
What this means for Europe is that there is no way to rush in the market when it comes to quantum technology. There are certainly additional efforts in quantum technologies, such as quantum programming and the development of algorithms, that could potentially surpass the hardware on the market, but the development of useful quantum computers currently requires a global effort.
This should prevent any immediate fear of a quantum winter — a period when entrepreneurship and investments in quantum technologies freeze — as researchers around the world work to improve the current generation of rudimentary systems.
Whether that translates into ROI for the VCs and entrepreneurs, however, is an entirely different question.
Boots on the ground
There are dozens of European startups focused on quantum computing. A report puts the exact number at 69 in 2020, and we’ve seen several new companies since then. We’d love to profile them all, but to keep this article readable, we’ve narrowed the focus to three movers and shakers in space.
#1: IQM
IQM is a spin-out of Aalto University and VTT Finland that builds quantum computers and what they call ‘co-designed’ quantum systems built for specific industrial applications. With its custom superconducting quantum processors, proprietary chipsets and new software and algorithm solutions, it is one of Europe’s leading quantum computing startups.
The systems IQM builds are full-stack quantum computers designed to be deployed on-site for customer applications. While IBM, Intel, Google and other research groups build quantum systems for use in cloud-based research and B2B applications, IQM’s systems are built where customers live. For this reason, IQM serves a clearly research-oriented market.
In July 2022, IQM . was awarded €120 million in funding by Global Fund for using quantum computing to combat the climate crisis. According to Dr. Jan Goetz, CEO and co-founder of IQM: “This funding underlines the importance of our mission: to build quantum computers for the good of humanity.”
#2: Pasqal
The next stop on our tour of Europe’s quantum computing scene is France, where the Institut d’Optique spin-out pasqal builds quantum processing units (QPUs) from atomic arrays. One of the company’s goals is to build hybrid quantum systems that use their QPUs for advanced quantum simulations.
Pasqal’s systems differ from the superconducting and gate-based systems made in labs such as Google and IQM. They use atomic arrays in what’s called a “neutral atomic architecture.” Essentially, the company uses lasers and a tool called “atomic tweezers” to capture individual atoms for the purpose of modulating them. This allows the scientists to use the trapped atoms as qubits for quantum calculations.
According to the company, Pasqal has raised €40 million in financing. In terms of spending that money, the company has just opened another lab in Canada where it plans to bring its European technology to the North American market.
#3: Oxford Quantum Circuits
You might be able to guess which university OQC spun out. It builds superconducting quantum circuits that boast of the company’s unique “Coaxmon”. This patented invention is at the heart of the company’s quantum-as-a-service products, including “Lucy,” the first European quantum computing system on Amazon’s AWS.
In 2017, Oxford researchers published groundbreaking research on what they called a “coaxial circuit QED architecture in which qubit and resonator are fabricated on either side of a single chip, and control and readout wiring is provided by coaxial wiring running perpendicular to the chip plane.” That same month, OQC was founded.
It’s now five years later and OQC just closed a series-A financing round with an investment of €38 million from Lansdowne Partners and The University of Tokyo Edge Capital Partners. The company will use the funding to expand into the Asian Pacific market and increase its internal R&D budget.
Europe’s quantum future
Industry analysts predict that the quantum computing market will grow to nearly six times its current size — that’s a cap of more than $3 billion. And if the aforementioned startups are any indication, we can be sure that at least some European companies will get their share of the pie. If the current outlook holds, there’s no better time than now for financiers and lenders to jump into the quantum sector (provided, of course, that you have the physics chops and have an idea worth funding).
However, there are a number of challenges for both entrepreneurs and investors that simply cannot be overlooked. First, experts have determined: both an education deficit and a brain drain (also known as talent export) as major issues for the global quantum sector. And second, there are no guarantees in science or technology.
In addressing the first problem, Europe is ahead of the US and other competitors when it comes to producing masters and PhD level physicists. Denmark, for example, produces most physicists per capita of any country, with an astonishing 635 grads per million inhabitants. However, what it makes up for in academia, it arguably loses in postdoctoral brain drain to Silicon Valley and big tech. This even extends to investments where, according to experts, around 25% of all European funding for quantum technologies is invested in non-European companies.
Since there are no guarantees in science, it is important to reiterate that quantum computing is still in its infancy. Scientists have shown that the technology works, but to date there are no really useful quantum computers. We can be pretty sure that quantum computers will mature to a point of usability. But there’s no telling exactly how useful they’ll be – especially if you’re trying to measure it through ROI.
That said, current investment trends combined with expert industry analysis seem to indicate that the current crop of European quantum computing startups is just the pioneering vanguard of an industry that could eventually become a backbone technology as ubiquitous as AI.
Contents
