Quantonation Ventures revealed the initial closing of its second early-stage investment fund, Quantonation II, with €70 million ($75M USD) raised towards a €200 million ($214M USD) goal. Focused on Quantum Technologies, the fund underscores Quantonation’s leading role in the burgeoning Quantum Tech industry, with investments already being made globally. Since its inception in 2018, Quantonation has backed founders translating quantum science and physics into real-world applications across sensing, communication, and computing. 

Its first fund, Quantonation I, exceeded its target by securing €91 million ($97M USD), investing in 27 companies globally, and achieving two exits. This success places Quantonation in the top quartile of Venture Capital investors, even amidst a general pullback in venture investments.

  • Quantonation, a VC firm specializing in quantum technologies, announces the first closing of its €200 million fund at €70 million.
  • The firm invests in early-stage companies developing quantum computing, communication, and sensing technologies.
  • Quantonation believes the quantum tech industry is reaching an inflection point and is positioned to invest in the next wave of companies.

Key initial investments from Quantonation II include ventures in quantum computing, materials for energy storage, and deep physics applications like high-resolution acoustic imaging and Lidar. Quantonation’s continued success and strategic approach position it uniquely as a pioneer in supporting and advancing the quantum technology sector.

  • Long timeframes: It can take a long time for quantum technologies to develop from research to commercial applications.
  • Technical complexity: Quantum technologies are complex and require deep scientific expertise to evaluate.
  • Uncertain market: The market for quantum technologies is still nascent and the potential applications are not fully understood.
  • High Capital Requirements: Developing quantum technologies can be exceedingly costly.
  • Regulatory and Ethical Issues: Navigating the emerging regulatory and ethical considerations surrounding quantum technologies.

It is well publicized that venture funding in quantum technology has seen a dramatic decrease over the past 18 months. Digging deeper into this trend, we notice that much of this decline is due to fewer seed and early stage investment rounds. We view a few key Success Factors for Quantum Tech Investing:

  • Identifying companies with strong scientific teams and a clear path to commercialization.
  • Investing in a diversified portfolio of companies across different areas of quantum technology.
  • Having a long-term investment horizon.
  • Building a strong network of advisors and partners in the quantum tech ecosystem.
  • Market Vision: Ability to foresee and invest in quantum technologies with significant market potential.

Correlation and causation are tricky topics in quantum tech, however, we also observe fewer new startups being created and less variety of startups. Our hypothesis is that the focus is on hardware across quantum tech applications and software, algorithm and application development is suffering – with fewer new startups seeing the light of day.

What stands out for us in the Quantonation announcement, in that context, are their efforts to build “venture studios”.  Venture studios aim to support startup creation by providing funds, equipment, space and support at the very early stages of the startup lifecycle.

Quantonation already announced two such venture studios:

“We are putting a lot of effort into not just discovering new startups but also aiding in the creation of new ventures in quantum tech” tells us Olivier Tonneau, Partner at Quantonation. He adds that “we expect to be able to announce a few more of these venture studios throughout the year.” These additional venture studios are already in the planning stages and include:

  • A venture studio in France, which is the last stages of a bidding process
  • A venture studio to cover the USA market 
  • An expansion into Asia Pacific

While there are a lot of existing quantum tech ecosystems they tend to be focused on community and workforce development. Critical aspects of our mutual growth but they do not help address the difficulty in creating new ventures in quantum technology. Quantonation is taking the leadership role on that front:

  • Early mover: Quantonation was one of the first VC firms to invest in quantum technologies and has a deep understanding of the space.
  • Global reach: The firm invests globally and has offices in Paris, Boston, and other locations.
  • Scientific expertise: The team includes scientists and engineers with expertise in quantum technologies.
  • Network of studios: Quantonation works with quantum venture studios around the world to identify and support promising startups.
  • Ecosystem Approach: Investing in a range of technologies to build an interlocking ecosystem rather than focusing solely on quantum computing.

Quantonation also emphasizes the creation of an ecosystem for quantum computing, networking, and sensing technologies, anticipating a significant impact across various fields. With a portfolio including industry leaders like PASQAL, Nord Quantique, and others, Quantonation is poised at a pivotal moment for Quantum Technologies. The fund aims to support 25 companies, working alongside quantum venture studios worldwide to foster new ventures. This global outlook for scientific talent and innovation is crucial for developing substantial businesses in the field.

April 10, 2024