Read Arma’s view on how quantum technology has been overlooked by the global investment community until recently, and how venture and growth investors now have the opportunity to back the emergence of the global quantum computing sector, on Forbes here.
Covid-19 has dramatically increased adoption and investment in technology, further advancing its diffusion across the global economy. But this was already happening before the pandemic struck. By contrast, the revolution in quantum computing that has taken place over a similar timeframe marks a radical departure from came before.
The revolution in quantum computing that has taken place over a similar timeframe marks a radical departure from came before.
In October 2019, Google announced it had reached ‘quantum supremacy’. Last year, researchers from four Chinese universities claimed that their prototype Jiŭzhāng quantum computer was allegedly 10 billion times faster than Google’s. Both these achievements moved computing beyond its traditional limits.
Despite the groundbreaking benefits quantum technology can bring, it has been historically snubbed by the global investment community. Only $1.4bn was invested into quantum technology start-ups between 2010 to 2019, amounting to a mere 0.25% of the total value of venture capital fundraising, according to Pitchbook.
We can also assume that any strategy into FS will do no harm to the existing core. Google and Facebook make their money today from digital advertising and together command 77% of that market. Thus they will not do anything that harms today’s source of cash and growth. Amazon’s core is from product and service sales so we can be sure that will influence their choices in FS. Further whatever any large cap tech does it will need to contribute to their goals of a Trillion dollar valuation and beyond. In the world of Google for example, financial services will compete with other big impact ideas such as drones, maps, cyber security, suite of office tools etc.
Google and Amazon have been more measured in FS than their Asian counterparts. Google Wallet is clearly just the start and we can imagine payments going through further upheaval with the implementation of PSD2 and the changing power dynamic between the bank, the merchant and the customer.
Quantum computing presents an exciting new opportunity for venture and growth investors, though it has to be approached with the understanding that the technology risks within this market are high – though with equally high potential returns.
But this is no longer the case. Commercial applications of quantum computing are developing at an unprecedented rate, and the area is no longer viewed as a focus area for just national governments.
Quantum computing has the potential to be useful for distribution networks, the making of a ‘quantum internet’ and generally for superfast computing. Financial services will also be impacted by quantum computing – last year, Goldman Sachs and JPMorgan were reported to be exploring ‘quantum finance’.
Commercial applications of quantum computing are developing at an unprecedented rate, and the area is no longer viewed as a focus area for just national governments.
There are now signs of nascent growth financing and even M&A activity within quantum computing. For example, Honeywell, the US tech giant, recently acquired Cambridge Quantum Computing, injecting up to $300 million into the new project. The startup will join Honeywell’s own quantum computing operations.
Quantum computing presents an exciting new opportunity for venture and growth investors, though it has to be approached with the understanding that the technology risks within this market are high – though with equally high potential returns.