Xanadu to go public on Nasdaq and TSX in $3.6-billion USD SPAC deal

Toronto-based quantum computing firm Xanadu has struck a deal to go public by merging with a special purpose acquisition company (SPAC) called Crane Harbor Acquisition Corp.

Upon completion, shares of the business are expected to trade on both the Nasdaq and the Toronto Stock Exchange (TSX), which could make Xanadu the first Canadian technology company to debut on the TSX in more than four years.

Xanadu aims “to build quantum computers that are useful and available to people everywhere.”

Christian Weedbrook, Xanadu

The transaction—which comes as quantum stocks have been soaring on the back of recent breakthrough claims by tech giants and quantum firms alike—is expected to raise gross proceeds of $500 million USD. The deal lends Xanadu a pre-money rollover equity value of $3 billion and the joint business a pro forma enterprise value of approximately $3.1 billion, and a pro forma market capitalization of $3.6 billion.

“We can’t ignore what’s happening in the public markets,” Xanadu founder and CEO Christian Weedbrook told BetaKit in an interview, noting that the company hopes to take advantage of investor excitement about quantum technology. Weedbrook highlighted that Xanadu becoming a public firm will provide an avenue for investors to back a “pure-play photonic quantum company.”

Xanadu, which claimed a networking breakthrough earlier this year, plans to use the net proceeds to accelerate its efforts to develop and deploy fully fault-tolerant photonic quantum computers. Weedbrook expects Xanadu to invest the bulk of the funding in developing its hardware, from expanding its facility to building, testing, and refining its tech. He also believes it will help with hiring and supporting the continued growth of Xanadu’s software offering.

Private institutional and strategic investors have committed $275 million in new financing to Xanadu as part of the deal. New backers like chip giant AMD, the asset management arms of BMO and CIBC, MMCAP Ventures, Planet First Partners, and Polar Asset Management Partners are providing 90 percent of that amount. Existing investors Bessemer Venture Partners, Georgian Partners, and OMERS Ventures have promised the remainder.

Xanadu could also receive up to $225 million through the merger with Philadelphia-based Crane Harbor. 

As SPAC investors can redeem their shares before business combination transactions close, it’s unclear how many investors will stay committed, or what the ultimate proceeds will be. This has created issues for others in the past, including Canadian-founded D-Wave, which initially hoped to raise up to $340 million but secured only a fraction of that amount, leaving it facing a cash crunch that it has worked to alleviate by selling $400 million in shares earlier this year.

Existing Xanadu shareholders and management will not receive any cash proceeds as part of this transaction and instead will roll over their shares into stock in the combined company as part of the deal, which is expected to close in late Q1 or early Q2 2026.

SPAC merger “significantly easier” than a private-market raise

Xanadu aims “to build quantum computers that are useful and available to people everywhere.” Weedbrook said today’s deal “inches us closer to achieving [that] mission.”

Founded in 2016, Xanadu is working to use photonics-based quantum computing to perform exceptionally fast and complex computations at room temperature, quicker than traditional computers. Xanadu claims its approach offers a few advantages, including the ability to leverage modern chip manufacturing facilities and existing optical components like fibre optics.

Earlier this year, Xanadu unveiled its new photonic quantum computer, Aurora, which builds on its previous X8 and Borealis systems. The company said it remains “fully committed” to the research and development required to create the world’s first fully fault-tolerant quantum computer over the next three years, as it works towards its goal of establishing a quantum data centre in Canada by 2029.

At the start of 2025, Weedbrook confirmed that Xanadu was looking to raise a private $200-million USD Series D. But the CEO said the firm decided to switch gears after seeing the excitement around quantum stocks and the ability that its peers had to secure more capital faster as public companies. 

“It started from that, [and] I think it’s really been validated,” Weedbrook said to BetaKit, highlighting that Xanadu was ultimately able to raise more than its initial Series D target in four weeks.

Weedbrook said it is “hard to know” whether this transaction signals that it would not have been possible for Xanadu to raise this type of money via traditional venture capital or private equity because the company did not complete its fundraise privately. “It was just significantly easier to raise compared to the private market,” he added.

Xanadu’s initial hope was to raise this funding entirely from Canadian investors. While the company fell shy of that goal, Weedbrook said Canadian backers are providing about half of the capital in the private portion of the financing. He said Xanadu decided to list on the TSX to be “pro-Canada” and potentially entice more big Canadian investors to get behind the firm.

“Unfortunately, we weren’t able to get any [new] Canadian pension funds interested, and so hopefully this is an avenue where we can get them excited,” Weedbrook said (Ontario pension fund OMERS’ venture arm was already an investor).

In light of the United States Department of Defense’s Quantum Benchmarking Initiative program—in which Xanadu is a participant—and the threat of losing quantum companies to the US, Canada’s AI minister Evan Solomon has teased that Ottawa plans to introduce new policies soon to help keep these firms in Canada.

RELATED: D-Wave sells $400 million USD in common shares to fund acquisitions, working capital

In its pre-budget submission, Xanadu called upon the feds to allocate funding to Innovation, Science and Economic Development Canada to support a public-private partnership that would build a quantum data centre in Canada. It also asked to broaden the investment mandate of the Canada Growth Fund to include strategic tech like quantum. 

The feds have already supported Xanadu’s efforts (the company has secured $40 million USD to date from Canadian and US governments). Weedbrook recently joined The BetaKit Podcast to discuss what role Canada could play in supporting domestic quantum going forward. Tomorrow’s federal budget could lay out those plans in more detail, and Weedbrook hinted that some more federal government support could be on the way.

Quantum computing hardware is challenging and expensive to develop. Prior to this deal, Xanadu had raised $290 million USD in total funding to date from a group of Canadian investors that includes BDC Capital, Georgian Partners, Golden Ventures, OMERS Ventures, Radical Ventures, and Real Ventures. Foreign backers have included Alumni Ventures, Bessemer Venture Partners, Capricorn, Forward Ventures, Pegasus Tech Ventures, Porsche Automobil Holding SE, Tiger Global, and Tim Draper.

The Crane Harbor deal marks a significant increase in Xanadu’s valuation from the $1 billion it was worth when the company closed its $100-million Series C round in late 2022.

In a message shared with employees, Xanadu said it believes a SPAC is “the best course of action to take in this current market environment, as it allows Xanadu the benefits that come from an [initial public offering] and being traded on Nasdaq and TSX, without some of the challenges of a traditional IPO.”

Xanadu won’t move from Canada on Weedbrook’s watch

Weedbrook described the SPAC route as a “well-worn path” taken by other quantum firms, and said he thinks they are an “ideal” vehicle for deep tech businesses in areas like quantum.

This would make Xanadu the first Canadian-listed quantum firm. D-Wave—which moved its headquarters from Burnaby, BC to the US in 2023—trades on the New York Stock Exchange.

When asked if and how Xanadu plans to avoid a similar move, Weedbrook said, “It’s definitely not going to happen on my watch. We’re going to stay here. We’ve got great support from the Canadian government in the past. We’re excited to see what happens in the future for government support as well.”

Weedbrook said that he and Xanadu’s headquarters will both remain in Toronto, where approximately 85 percent of the firm’s 260-person team is currently located. Going forward, he said Xanadu intends to open new offices around the world and pitch investors in regions like the Middle East and Southeast Asia.

“Today, we’re good for money, but [this move] does allow [us] to raise additional capital in the future if there’s a need for it,” Weedbrook said, adding that he expects it will also help the company assemble more competitive compensation packages for new hires and enable potential mergers and acquisitions.

All images courtesy Xanadu.