Quantum technology in the UK: top companies to watch

The UK has already been credited as an early leader in the field of quantum, with an impressive range of quantum startups, academic institutions and government bodies working together to develop this technology. Whilst the sector is still in its infancy, real-world and commercial applications are very much within reach.

What is Quantum Technology?

Quantum technology works by using the principles of quantum mechanics—the physics of sub-atomic particles. The technology has advanced leaps and bounds over the last few decades, and is allowing us to accelerate innovation at a whole new rate. The technology can be used in a number of different ways: in sensor accuracy, improving navigation, helping with medical diagnosis, monitoring the environment —the list goes on.

Many companies across the world are trying to achieve ‘quantum supremacy’, mainly by developing quantum computers that are more powerful and complex than those we currently use. The main players in the race include Google, Microsoft, IBM, Intel, D-Wave and Rigetti. However, it’s still early days for the field, with new entrants to the scene continually popping up.

An Overview of the Sector

The quantum sector is still relatively young; we only track a small number of quantum companies on the Beauhurst platform—22 to be exact. Just over three quarters (77%) are in the seed stage, 18% are in venture, and 5% are in growth, with none in the established stage of evolution. Around 50% of these companies are academic spinout companies, and most are based in Cambridge or Oxford. As it stands, 23 grants have been secured by these quantum companies, equating to around £4m. A total of 33 fundraisings have been made into the sector worth a combined £50m. 

The quantum sector began to see investment in 2015 when £1.9m was invested through three funding rounds that year. From 2015 to 2017,  the amount of capital pumped into the sector continued to grow. But this growth stalled in 2018, when pounds invested dropped by 80% from the previous year, with just £1.7m invested. That same year, the UK government pledged to invest in quantum companies. In 2019 fundraising rose by 91% to a record of £19.4m. 

Despite the outbreak of COVID-19 and subsequent slowdown in investment, the quantum sector is still looking strong. Seven deals totalling £16.1m have been completed so far this year, already the same number of deals as 2019. Three of those deals were completed in Q2, equating to £15.1m (90%) of the total amount deployed so far.

Top Ten UK Quantum Companies

Ranking in first place is Cambridge Quantum Consulting, which has secured £19m in fundraisings. Founded back in in July 2014, it has built a quantum computer operating system called “t|ket>” that uses algorithms to solve issues surrounding big data. In February 2020 the company announced that IBM had become a strategic investor along with Honeywell Ventures. The £411k investment came after years of collaboration between CQC, IBM and Honeywell’s quantum computing teams. Other investors include Grupo Arcano and Touchstone Gold.

Runner up is Quantum Motion Technologies, the developer of a silicon-based quantum computer. The UCL and Oxford University spin-out moved into the top ten in May 2020, having raised an £8m equity round led by Dutch firm INKEF Capital. Octopus Ventures and the National Security Strategic Investment Fund also joined, along with existing investors Oxford Sciences Innovation, Parkwalk Advisors and IP Group. The investment is being used to facilitate development of the company’s quantum computing architecture and takes their total fundraisings to £10m.

Another notable mention includes Universal Quantum, (which also develops quantum based computer technology) which raised its first equity fundraising round of £3.6m in June 2020. The University of Sussex spin-out company was only founded December 2018 and already has a list of prestigious investors. This includes Hoxton Ventures, Propagator VC, Luminous VC, 7percent, Village Global (Jeff Bezos, Bill Gates and Mark Zuckerberg are part of this fund) as well as a number of influential individuals.

The Impact of COVID-19

Using our latest ‘COVID-19 impact data’ we’ve found that 32% of quantum companies have been potentially positively affected by the pandemic. 

Not only that, our research has revealed that no quantum companies have been critically or severely affected, whilst only 14% have been moderately impacted. This is low compared with the wider ecosystem, where 17% of high-growth companies fall into these categories. 

The figures show that despite the current economic upheaval caused by COVID-19, the quantum sector is battling it better than most. Things look set to carry on up from here, especially as the UK government unveiled more funding for the sector last week. 

In the new scheme 38 new projects to benefit from over £70 million of government funding to help power quantum technologies across the UK. These ground-breaking projects will involve nearly 30 universities and research organisations across the UK and help with projects like the diagnosis of cancerous tumours during surgery. This funding is part of a wider £1b government and industry investment to commercialise quantum innovations, and is likely to secure the UK’s status as a world-leader in quantum science and technologies.