NON-BINARY THINKING INVESTMENTS
A
s well as a means to harness technology to improve portfolio
efficiency and maximise machine learning, quantum computing is also fast becoming an investible asset. The rationale is quantum
could work to advance many technologies. This means that the stock of many technology companies will benefit, especially those that have an involvement in quantum processes. Christophe Jurczak, chief executive
of Quantonation, a French early- stage venture fund, says now is a perfect time to invest for an early stage investor. “It’s an opportunity comparable
to investing in artificial intelligence companies five-to-10 years ago, when these technologies came out to be recognised as disruptive and applicable to many fields. Quantum computing too, is a potential game changer.” However, as things stand there
is no way to invest directly into quantum. Investing in technology stock with a direct exposure to quantum is the next best thing— IBM, Microsoft and Google being the obvious contenders. Stocks with an involvement in cryptography,
algorithms, communications, defence, and basic computing, and therefore an indirect interest in quantum, are also inherently attractive. This is set to change however.
Jurczak says: “We’ll hear more about investment rounds in advanced companies and newcomers to the space. Large industrial players in the quantum space such as IBM or Microsoft in the US, but also Alibaba and Huawei in China, Toshiba in Japan and Atos in France are working hard, recruiting heavily.”
VENTURE CAPITAL TRUSTS Quantonation is dedicated to ‘Deep Physics’ start-ups with a focus on the emerging and disruptive field of quantum technologies. Quantonation co-invested in a £2 million ($2.6 million) pot for KETS Quantum Security in late 2018. The University of Bristol start-up business specialising in quantum encryption with the potential to protect all manner of private data. “In terms of investment in the next 12
months, I expect good opportunities for us to invest at seed stage level and to lead rounds in the $2 million to $8 million range for the companies that will be the leaders of the future quantum industry—in sensing, computing and telecommunications. “In the 12 months to two years
range, we’ll have first series A follow-on rounds, with much more capital to be invested in the most successful technologies, with rounds in the $10 million to $20 million range. It will be clearer then what the new business models associated to these technologies will be, what the key applications benefiting from the improvements in performance will be. We might see the first exits especially in the sensors space, for example for the next magnetic resonance imaging (MRI) generation of high-sensitivity gravimeters.”
EXCHANGE-TRADED FUND There is also an exchange- traded fund (ETF) dedicated to quantum—QTUM. It is run by Defiance ETFs and was launched in 2018. It offers investors liquid,
transparent, and low-cost access to companies that are developing and applying quantum computing and other transformative computing technologies. The underlying index, BlueStar Quantum Computing and Machine Learning Index (BQTUM), is rules based and tracks about 60 globally-listed stocks across all market capitalisations with equal weighting. The index is reviewed every six
months and, to be included, a company must be engaged in the research and development or commercialisation of systems and materials used in quantum computing. Examples of this include advanced traditional computing hardware, high-powered computing data connectivity solutions and cooling systems, and companies that specialise in the perception, collection and management of heterogeneous big data used in machine learning.
ISSUE 75 | 2019
CAMPDENFB.COM
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