Vancouver-based Photonic has secured $180 million CAD in the first close of its latest investment round as it plans to scale up its networked quantum computing technology and start serving enterprise customers.
Paul Terry, Photonic
“If you get it right, if you’re the first and best, then this is going to be a really powerful kind of anchor company in Canada, and that’s our target.”
In an interview on Monday, Photonic CEO Paul Terry told BetaKit that the company expects to close “a lot more than that” in the next three months, potentially up to $250 million USD, to commercialize its quantum technology. This first close is “technically the last round we need to go to cash-flow positive,” Terry claimed.
London, UK-based climate-focused firm Planet First Partners led the investment. New investors included RBC and telecommunications firm Telus’ venture capital (VC) arm. All existing investors, including strategic partner Microsoft, also participated.
Founded in 2016, Photonic has now raised $375 million CAD in its pursuit 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 together.
Entanglement is when two particles become linked together, even when they’re far apart. “That is the thing that allows you to teleport information,” Stephanie Simmons, Photonic’s co-founder and chief quantum officer, said in an interview on Monday. In addition to her role at Photonic, Simmons is a Simon Fraser University advanced research fellow and a co-chair of the advisory board to Canada’s National Quantum Strategy.
Simmons said potential applications for Photonic’s technology include eavesdropping detection or locating unauthorized listening activity over networks, both applications that make the tech alluring for telecoms like Telus.
Put simply, Photonic is harnessing entanglement to perform increasingly powerful computation, and sell that capability to corporations and, eventually, governments.
“The idea here is not to sell a computer to the 10 people who can afford to buy one, but to sell quantum computing services to 10,000 companies that need to operate on computers,” Terry said, describing a similar model to how cloud-computing services work.
What sets Photonic apart from the competition in Simmons’ eyes is that it has solved the “scale challenge,” as it approaches truly useful quantum technology services for businesses.
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Terry Doyle, managing partner of Telus Global Ventures, told BetaKit in an email on Monday that its investment in Photonic is a follow-up to its existing partnership, where Telus provides access to its fibre-optic network.
“Photonic’s distributed architecture aligns with our vision for practical, quantum‑enabled services at data‑centre scale,” Doyle said.
CEO Paul Terry said the fundraise will allow the company to add 70 team members to its 160 employees, mainly in commercialization roles. Photonic’s revenue is in the single-digit millions with its initial, or “journey” customers, he said, with plans to be in the tens of millions by next year.
Photonic’s fundraise comes on the back of its participation in Canada’s new Quantum Champions Program, modelled after the US DARPA Quantum Benchmarking Initiative (Photonic has also advanced to the second phase of that program). Though slightly different in their funding structures, the initiatives support companies in developing a functional, fault-tolerant quantum computer.
The hefty capital raise comes as other quantum technology companies have experienced difficulties raising VC money. Toronto’s Xanadu, which is developing quantum computers and networking them together, said in November it had struck a deal to go public via a special purpose acquisition company (SPAC). CEO Christian Weedbrook noted to BetaKit at the time that it was “significantly easier” to raise through a SPAC deal than in the private markets, after the company had set out to raise a $200-million USD Series D.
Going forward, Terry anticipates a consolidation in the quantum computing market following a number of industry breakthroughs in 2025. His plan for Photonic is to stay private and focus on generating revenue.
“If you get it right, if you’re the first and best, then this is going to be a really powerful kind of anchor company in Canada, and that’s our target,” he said.
Feature image courtesy Photonic.