A new €15 million fund has been launched to help transform quantum technology research in the Netherlands into venture capital-investable startups.
Supported by Quantum Delta NL (QDNL), a foundation that aims to stimulate and scale up the Dutch quantum ecosystem, the so-called QDNL Participation Fund has a dual focus: early stage startups in the sector and research teams working on promising quantum technologies before integrating as a startup.
In the first case, the financing will amount to € 1.5 million, with the foundation usually leading the investment round. In the second case, the fund makes € 50,000 available to researchers via a SAFE note agreementmeaning the funding is converted into an equity investment once the startup is ready to move forward as a business.
“We start early and provide objective and patient capital.
The fund expects to make about 10-15 SAFE note investments (up to €50,000) and about 5-10 seed investments (up to €1.5 million), Ton van ‘t Noordende, Managing Director of QDNL Participations, told Applied Sciences. “We start early and can provide capital objectively and patiently.”
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The fund intends to invest in companies across the quantum sector, including hardware, sensors, entanglement and superposition technologies, as well as communications and critical supply components.
According to QDNL’s own data, 32.7% of industry funding has gone to software, while 64.4% has been invested in hardware and nearly 3% has been invested in hybrid hardware-software.“We expect to follow this trend,” says Van ‘t Noordende.
As for the research teams looking to enter the startup world, these will mainly come from leading Dutch universities, including TU Delft, Eindhoven University of Technology, Tweente University, Leiden University and the University of Amsterdam.
“Spinning out of academia is still a bottleneck for European researcher-driven entrepreneurship.
In addition to QDNL Participations, the foundation has also launched a support program for emerging quantum tech founders called Infinity. This aims to help Dutch academic researchers navigate the university spin-out process and secure their first round of funding, by providing them with access to a network of more than 800 deep tech investors worldwide.
Infinity is offered as an “on-demand” service for when it might be needed and is free of charge.
“We believe there is huge untapped potential as billions of value in new innovations are not shared and not commercialized. Leaving academia remains a bottleneck for European researcher-driven entrepreneurship,” adds Van ‘t Noordende.
Addressing the funding gap in quantum technology
Fundraising is “the biggest challenge” for Dutch deep tech startups, Van ‘t Noordende told TNW. “The [funding] The gap does not only exist in the Netherlands, but throughout Europe. Investments made by startups headquartered in the US, UK and Canada account for approximately 80% of the value of all private investment in quantum technology and approximately 62% of all private investment.”
As he went on to explain, most of the funding is “focused on and above Series A stages,” with multiple factors leading to a lack of early-stage funding. Not only is there a lack of investors who specialize in early stage investments, but it is also a challenge for investors outside the scientific community to know “where to invest or how to provide longer term support”.
QDNL Participations tries to address this problem by including a global network of leading quantum tech researchers in the process, who are actively involved in the early stages of a startup and can later become scientific advisors or board members.
“Our fund removes the risks of what is perceived as a ‘wild gamble’ and, through direct intervention, increases the likelihood of long-term impact and financial success,” Van ‘t Noordende added.
According to Freeke Heijman, co-founder and director of Ecosystem Development of QDNL, the goal of Infinity and the new fund is to enable the sustainable growth of quantum startups in the Netherlands, so that they can compete in the global market.
And with the quantum technology market is expected to be worth more than €3 billion by 2030sufficient funding to build resilient ecosystems will play a central role.