RBC and Telus are backing the quantum computing company in its quest to develop enterprise-ready technologies.
Vancouver-based Photonic has secured C$180 million in the first close of its latest investment round as it plans to expand its quantum computing network technology to serve enterprise clients.
“If you do it right, if you are first and best, then this will be a really powerful anchor company in Canada, and that is our goal.”
Paul Terry, Photonic
In an interview on Monday, Photonic CEO Paul Terry told BetaKit that the company expects to close “a lot more” (potentially up to $250 million) in the next three months to commercialize its quantum technology. This first close “is technically the last round we need to achieve positive cash flow,” Terry said.
The investment was led by London-based UK climate firm Planet First Partners. The new investors included RBC and the venture capital division of the telecommunications company Telus. The event was also attended by all existing investors, including strategic partner Microsoft.
Photonic, founded in 2016, has already raised C$375 million to develop a useful quantum computer and sell its services at scale. Terry told BetaKit that the company is “commercializing a new branch of physics” by using a property of quantum physics called entanglement to network quantum computers.
Entanglement is when two particles connect with each other even though they are far apart. “This is what allows you to teleport information,” Stephanie Simmons, Photonic's co-founder and chief quantum scientist, said in an interview Monday. In addition to his work at Photonic, Simmons is a research fellow at Simon Fraser University and co-chair of the advisory board for Canada's National Quantum Strategy.
Simmons said potential applications for Photonic technology include eavesdropping detection or tamper detection on networks – both applications that make the technology attractive to telecommunications companies such as Telus.
Simply put, Photonic uses entanglement to perform increasingly powerful calculations and sells these capabilities to corporations and, ultimately, governments.
“The idea here is not to sell a computer to 10 people who can afford to buy it, but to sell quantum computing services to 10,000 companies that need to run computers,” Terry said, describing a model similar to how cloud computing services work.
What sets Photonic apart from its competitors, according to Simmons, is that it has solved the “problem of scale” by getting closer to truly useful quantum technology services for businesses.
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Terry Doyle, managing partner of Telus Global Ventures, told BetaKit in an email Monday that its investment in Photonic is an extension of an existing partnership in which Telus provides access to its fiber network.
“Photonic’s distributed architecture aligns with our vision of practical quantum services at data center scale,” Doyle said.
CEO Paul Terry said the fundraising will allow the company to add 70 team members to its 160 employees, mostly in commercialization roles. Photonic has revenues in the millions and initial customers, or “travels,” in the tens of millions, with plans to reach tens of millions by next year, he said.
Fundraising for Photonic resulted from her involvement in a new Canadian project. Quantum Champions Programmodeled after US DARPA. Quantum Benchmarking Initiative (Photonic has also moved into the second phase of this program). While these initiatives vary slightly in funding structure, they help companies develop a functional, fault-tolerant quantum computer.
The significant capital increase comes as other quantum technology companies have found it difficult to raise venture capital funds. Toronto-based Xanadu, which develops and networks quantum computers, said in November that made a deal Go public through a special purpose acquisition company (SPAC). CEO Christian Widbrook noted to BetaKit at the time that it was “significantly easier” to raise funds through a SPAC deal than through the private markets, after the company had set out to raise US$200 million Series D.
Going forward, Terry expects the quantum computing market to consolidate following a number of industry breakthroughs in 2025. His plan for Photonic is to remain a private company and focus on generating revenue.
“If you do it right, if you're first and best, then this will be a really powerful anchor company in Canada, and that's our goal,” he said.
Image courtesy of Photonic.
