Sydney-based Silicon Quantum Computing (SQC) has more than doubled its valuation thanks to a $50.4 million Series A capital raise, with further investments from seed round backers such as the Australian Government, the Commonwealth Bank of Australia (ASX: CBA), Telstra (ASX: TLS) and the University of New South Wales (UNSW).
The announcement comes more than a year after the company, founded by former Australian of the Year and scientist Michelle Simmons, announced the raise and its intentions to attract a $130 million capital injection.
The resulting sum may fall well short of that goal, but it takes patient capital and leadership to forge ahead with such groundbreaking and expensive technological development. The raise at $1.75 per share also takes SQC's valuation to $195.3 million - a 136 per cent lift on the previous valuation.
In June last year and two years ahead of schedule, SQC created the world’s first integrated circuit manufactured at the atomic scale - a key milestone for the startup's ongoing quest to manufacture the world’s first scalable, error-corrected quantum computer.
The promise of quantum computing is to tackle challenges that would be too complex for classical computers by utilising the laws of quantum mechanics, which dictate how the laws of physics work differently at the atomic or sub-atomic scale.
There are numerous fields either in or adjacent to quantum technology that are ripe for research and new applications. A sub-set of Australia's venture capital community is well aware of this, and in 2023 to date there has been at least $127 million tipped into prospective Australian startups in the space including SQC.
These include Quantum Brilliance which secured $26 million to help develop its miniaturised quantum computing products and solutions, Q-CTRL which raised US$27.4 million for its quantum infrastructure software, and a raise of $12 million for Nomad Atomics - a company which is not involved in quantum computing per se but its sensor technology operates at the quantum level.
With the latest funding, building on an $83 million seed round in 2017, SQC chair Stephen Menzies says the next goal is to create the world's first logical qubit in silicon; a 'qubit' being the quantum computing equivalent of the 'bit' that most of us know as the smallest unit of data that a traditional computer can store.
"We are happy to achieve an up-round in such a tight funding environment. In periods where capital is expensive, we see it as advantageous to defer a bigger raise," says Menzies.
The Australian Government released its National Quantum Strategy in May 2023, alongside the updated List of Critical Technologies in the National Interest, in which quantum technologies is a priority field. According to CSIRO, Quantum computing is projected to be a $6 billion opportunity for Australia, and create 19,400 jobs over the next two decades.
It is a field that certainly forms part of the broader industry of 'deep tech', which according to a survey from Cut Through Venture was the fourth-most popular sector amongst investors for the last two quarters, up from 7th in the last quarter of 2022.
"SQC has a globally unique technology to manufacture processors with atomic precision, and this approach to building a quantum computer has many advantages over our multinational competitors,” says SQC CEO and founder Michelle Simmons.
"History has shown that emerging technology ecosystems cluster around organisations that manufacture.
"Backed by this funding and our team of incredibly talented physicists and engineers from around the world, SQC is well placed to become a central hardware manufacturing hub for the quantum computing industry, both in Australia and globally."
Other investors have given glowing appraisals of the SQC business model and the potential of what it may achieve.
"We’re a big believer in the potential of quantum computing to transform industries and solve some of world’s problems that challenge us today. This potential and our belief in Michelle Simmons and the SQC team is why we’re a foundation investor and continue to support the innovative work they’re doing," says Telstra's group executive for product & technology, Kim Krogh Andersen.
"As an early stage Investor in SQC, we can see the economic and business opportunities that could be opened up through the development of a locally-based quantum computing sector by a recognised Australian leader in this field," adds CBA chief information officer for technology, Brendan Hopper.
"The work being done by Professor Simmons and her team is of national and international significance and we are proud to be supporting the next phase of SQC's growth."
UNSW vice chancellor and president Attila Brungs emphasises the company was spun out of world-leading research within the UNSW Centre of Excellence for Quantum Computation and Communication Technology.
"The company is a cornerstone of the quantum ecosystem at UNSW, in NSW and for the benefit of Australia," Brungs says.
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