Investing in Quantum Source: Quantum Computing and the Photonic Promise

At the end of last week, we happily announced Grove Ventures’ latest investment in Quantum Source (QS), a $15 million Seed funding round co-led by Pitango First, Eclipse Ventures, and ourselves.

Quantum Source’s amazing story, which also made the cover of The Marker Week this weekend, is unique in two aspects: the team (which fits Grove’s principle of always putting people first), and, of course, their very ambitious technology. Aiming to enable quantum computers to scale to millions of qubits, three serial entrepreneurs who sold companies to multinational corporations and one Professor from the Weizmann Institute of Science joined forces to establish Quantum Source. Oded Melamed, CEO, who was the co-founder and CEO of Altair Semiconductor (acquired by Sony); Gil Semo, VP R&D, who was among the founding team of Anobit Technologies (acquired by Apple); Dan Charash, Chairman, who was the co-founder and CEO of Provigent (acquired by Broadcom); and Prof. Barak Dayan, Senior Scientist and founder and head of the Quantum Optics lab at the Weizmann Institute of Science. The founders were joined by Shlomit Semel, VP HR, who helped them build an all-star team with twenty-five physicists and engineers, fifteen of whom hold PhD degrees.

We noticed major shifts in the quantum computing innovation space a few years ago. Back in 2019, we realized that the quantum computing industry is at a turning point, and published a piece on the Grove Ventures’ Medium Publication titled Is the Age of Quantum Computing Closer Than Imagined?.

Today, both global and local ecosystems are in a different, somewhat more mature state. After the dust has settled from the Google–IBM fights over who’s breakthroughs are worthy to be considered ‘quantum supremacy’, additional companies like Honeywell (which later formed Quantinuum after completing a business combination with Cambridge Quantum), IonQ and Rigetti (both of which later became public through SPAC mergers) have added their exciting announcements to quantum computing’s increasing innovation fire.

The question is no longer whether a proof-of-concept is achievable, with an architecture that is based on a small number of qubits, but rather how to scale to a commercially useful quantum computer that will be based on a high number of qubits for computation. If scientific research is able to solve the complex scalability issue in quantum computing, the implications will be huge, as large-scale quantum computers are expected to instigate a revolution in entire industries thanks to their enormous, unprecedented computing power. These computers might accelerate, for instance, the development of new drugs and shorten the time pharma companies can introduce new medicines to the market.

Venture capitalists understand the progress and the potential, and are lately more willing to bet on the quantum computing space (some believe that the risks in this science-based domain are so substantial, that diversification is crucial and one should select a number of portfolio companies in quantum computing that rely on different technologies or support different aspects of its new phase — in software and hardware, for instance).

At Grove Ventures VC, we met with multiple incredible teams in the field over the past few years, but Quantum Source’s passion, experience, and expertise managed to convince us to co-lead this investment. In order to solve commercially valuable problems, a quantum computer with millions of qubits is required. While most research groups and companies active in the field rely on matter-based technologies, e.g. superconducting qubit (a basic unit of quantum information) or trapped ions, and have built quantum computers with a small number of qubits (tens or hundreds of qubits), Quantum Source’s vision is to enable scaling quantum computers to millions of qubits with their breakthrough photonic technology.

We know it’s a big technological gamble, but we are not afraid of taking big bets, and we are positive that with Quantum Source, we found the right people for the job.

In the two sections below, I will share an overview of Israel’s growing quantum computing innovation ecosystem, and explain why we believe that the unconventional photonic approach has a good chance to actualize a useful quantum computer.

Growing Fast: The Israeli Quantum Computing Ecosystem

In the race for a useful quantum computer, the Israeli government allocates serious resources for research and development. Within a couple of years, the first buds of a local startups ecosystem is starting to form.

In 2018, The Steering Committee for Quantum Science and Technology published its proposal to strengthen the local academy. In January 2020, The National Infrastructure for Research and Development Forum announced a National Science and Technology Quantum Program, headed by Dr. Tal David, with a budget of NIS 1.25B for five years. This news was followed by the Israeli Innovation Authority’s announcement in June 2020 of the approval of a quantum communications initiative. The initiative will focus on the development of data center communication systems, information transfers to a network, and secure communication systems for transmitting encryption keys. This February, the authority announced it will allocate NIS 200M out of its five-year abovementioned budget, to fund a local Israeli Quantum Computer.

As often happens in Israel, the government is not the only generator of innovation. The IDF was quick to adopt a novel approach and announced last year that it is opening the first Quantum Computing course. Universities and industry leaders have also started to form connections: In April, IQM the Hebrew University of Jerusalem and Bar-Ilan University announced the beginning of a new research collaboration to accelerate the advancement of quantum computing.

Private equity and venture capital funds have also started actively placing their bets on local quantum computing startups. The Israeli quantum computing scene, which was based mainly in academia, has developed into startups.

Quantum Source is joining some notable players including:

Full Systems Startups:

Quantum Machines — Develops quantum control systems for quantum computers.

Quantum Art — Still in Stealth Mode.

Software-focused Startups:

• Classiq — Focuses on the software development side for the quantum computing age, by developing a platform for automation and synthesis of quantum algorithms.
• Qedma — Develops algorithms and software tools for quantum computer companies, so that quantum computers can be used to solve application problems.
• QuantLR — Develops Quantum Cryptography software solutions using the principles of quantum physics.

In the Race for Quantum Computing, Photonic Architecture Pulls Ahead

So, why did we decide to partner with Quantum Source and its unique approach?

As mentioned above, quantum computers use quantum bits (qubits), while classical computers use magnetic ‘bits’ for computation. There are a variety of technologies used to make qubits, each with its own set of strengths and weaknesses.

Many hardware architecture and companies today rely on qubits based on superconducting circuits or trapped ions, which demand extremely cold temperatures, as heat can disrupt the qubits. The expensive systems required to hold qubits at such temperatures might make it a challenge to scale to high numbers of qubits. On the other hand, photonic quantum computers are particularly attractive, as photons (a) do not interact with the environment or with each other [=a very low cross-talk in the architecture] and (b) can be generated in high volumes on a chip. The combination of these two traits should enable scaling up to millions of qubits.

This might become a reality using one of the two main types used for Photon qubits: squeezed light and single photons. For the moment, encouraging signs are coming for photonic quantum computers, mainly from two intriguing companies who are leading the development of a photonic quantum computer:

The first is the very-promising and heavily-funded (more than $650M in financing to date), PsiQuantum, which uses single photons as qubits. By the middle of this decade, the company promises to have completely set up all the manufacturing lines and processes necessary to begin assembling a final machine: a fault-tolerant, error-corrected quantum computer with hundreds of logical qubits and billions of gates.

That is quite a statement. Building a commercially useful quantum computer is challenging due to complexity, noise and cross-talk issues, which increase as more qubits are added. In other words, the challenge is to produce the maximum reliable qubits, while maintaining system operations. Different quantum computers currently being developed rely on various technologies, that struggle with scalability.

“Rather to try and scale a quantum process, we took a scalable process and have made it quantum”, said PsiQuantum’s CEO Jermey O’Brien in a video webinar. Back in 2009, he published a research paper that described how encoded photons of light could be used to perform quantum computations. Today, the company is promising to make this a reality: a general-purpose silicon photonic computer designed to facilitate quantum computing operations. His co-founder at PsiQuantum Terry Rudolph is also optimistic about their chances, and so is the team’s Director of Quantum Architecture, Naomi Nickerson, who in August last year explained the uniqueness of photonic quantum computing architectures.

In May 2021, PsiQuantum and GLOBALFOUNDRIES announced a breakthrough in their partnership to build the world’s first full-scale commercial quantum computer. The two companies are now manufacturing the silicon photonic and electronic chips that form the foundation of the Q1 system, the first system milestone in PsiQuantum’s roadmap to a commercially viable quantum computer with one million qubits and beyond.

Another photonic-based quantum computing company that draws interest is Xanadu. With more than $135M in funding, the Toronto-based company’s platform (“The first Photonic Quantum Computer on the Cloud”) leverages advanced artificial intelligence to integrate quantum silicon photonic chips into existing hardware to create a full-stack quantum computer. This will enable clients to receive quantum technology-based computing facilities using a photonic cluster state technology.

The race for a quantum computer continues at a rapid pace. Only a few years after understanding that it is plausible to create a commercial quantum computer, already companies are willing to put on the record that, a much-improved version will be revealed within this decade. If photonic quantum computing indeed reaches the expected milestone, it will dominate the quantum computing market. We at Grove Ventures are betting on that. Therefore, we are happy to partner with Quantum Source. We strongly believe in this team, their vision, and their unique technology, as well as in their ability to materialize a major breakthrough idea into a scalable product.