Schr?dinger’s Unicorns

If we survive these Tumultuous Twenties, by 2030 we will enter the decade of quantum computing. It will change our lives.

Our world is about to change.

No, I’m not referring to the looming famine, bear market and rampant inflation triggered by Russia’s invasion of Ukraine and the resulting disruption of the world’s grain, fertilizer and energy trade. Nor do I mean the rumbling Covid-19 pandemic, nor our as-yet unchecked, lemming-like march toward self-inflicted climate catastrophe.

Amid this carnage, let’s consider some good news about the future – once we get there.

After these Tumultuous Twenties, all the signs suggest that by 2030 we will enter the decade of quantum computing. It will change our lives.

By 2030 there will be many thousands of quantum computers available worldwide. They will not be on your Christmas list or bought for a precocious barmitzvah boy, but they will be available to research institutes, governments and corporations.

Quantum computing, in the simple terms that most of us can understand, harnesses the laws of quantum mechanics to solve problems too complex for classical computers. If we get it right, the effect will be much greater than the step change that has placed millions of times more computing power in a smartphone than on Apollo 11.

Quantum is awesome. It will reduce processing times from months to seconds for certain applications and help us to solve big, currently unsolvable, problems. It will bring about a revolution in what technology can achieve and how fast it can achieve it.

Getting there will not be easy. Quantum computers are sensitive, finicky, temperamental machines that until 2021 needed to be maintained at sub-zero temperatures in near silence in order to function. The challenges are enormous, but the potential benefits are almost impossible for us to predict.

For investors, this is a huge opportunity. The dawn of the quantum age will eclipse the technical revolutions we have witnessed since the first personal computers were developed in the 1970s: the web, email, VOIP, flash drives, WiFi, the cloud, smartphones, streaming. Just imagine if you had bet on one of those transformative technologies before it became the standard.

What makes this such an exciting area is that virtually nothing will be left untouched. This will not just be a copy from traditional computing architectures to quantum computing architectures. We must assume that many companies will have to be recreated, improved and changed for the new quantum reality.

We don’t yet know and we cannot yet see exactly how it is going to happen. Just as previous advances forced us to re-write all we know about computing, quantum is another major reboot in the history of technology.

Schr?dinger’s Unicorns, the companies that emerge to lead this revolution, already exist in the knowledge and expertise we have amassed so far, but they do not yet exist in the new world that quantum will itself create. We must re-learn everything we thought we knew about computing, just as digital audio and video forced us to re-learn everything we thought we knew about mass entertainment. All the tools we need for high-performance computing have already been developed – but the quantum computing tools are still nascent. We have spent trillions of dollars and decades developing all this computing know-how, but now we have to go back and do it all over again.

As investors, we are at that same inflection point that must have faced the previous generation eyeing Apple or Microsoft stock in the 1970s in another challenging decade with inflation, an energy crisis and a bear market in the headlines. Luckily, you investors who bet on the Microsoft and Apple IPOs and HODLed since then have seen the value of those once-small startups increase over a thousand?times. We have a rare opportunity to roll back history and get in on the ground floor and invest in an industry that promises similar growth.

The amount already invested in quantum is unclear because so many companies are still in stealth mode. According to McKinsey, quantum investment doubled from $700 million in 2020 to $1.7 billion in 2021, and startup activity has skyrocketed since 2015. Quantum Insider puts the 2021 investment figure at $3.2 billion.

This is just the start. There are likely to be hundreds of billions, if not trillions, of dollars of activity 10 or 20 years from now. Even in the infancy of this industry, some companies are already earning revenues and becoming viable. Over the next decade, quantum industry and infrastructure will develop and activity will become intense.

“If you make that scalable quantum computer, your advantage is so great that you’ll leave everyone else in the dust,” Denis Mandich, CTO of quantum entropy startup Qrypt, told Tech Republic. “That’s why so much money is pouring into this sector and why companies are hiring at an unbelievable pace.”

We still do not know how long the process will take, how big the required changes will be, nor how much investment will be required to finance this and make it happen. Nor do we know the next, post-quantum revolution that lies way beyond the horizon.

Individual companies are already raising funding rounds of $100 million or more. This is a classic case of what venture capitalists are supposed to do: look out over the horizon at a huge industry of the future.

Not all investors are enthusiastic about quantum. It requires a long, patient outlook over the horizon to the end of this decade and beyond. When OurCrowd started looking at quantum startups, we wondered whether our investors would be interested. How many of our investors really understand quantum technology? Do they have the staying power and the patience to see this through?

For us, at least, the initial answer is clear. Our investors have voted with their wallets and their response is “Yes.” Over the last two years we have invested more than $17 million dollars in six companies, creating Israel’s largest quantum investment portfolio. Several are currently raising investment rounds on the OurCrowd platform.

The range of the companies in our portfolio indicates the broad promise of quantum technology to change not just computing but people’s lives.

Polaris Quantum Biotech is revolutionizing drug discovery, reducing key stages of the process from months to days, and costs from millions of dollars to thousands, by applying the latest innovations in cloud, quantum computing, artificial intelligence, and machine learning. QuantLR uses advanced quantum encryption to provide superior data security that cannot be cracked – even by quantum computers in rogue hands. Quantum Machines has built the leading cloud infrastructure company for quantum computing. Classiq provides a revolutionary new tool to program quantum computers. IQM is the European leader in quantum computers, building physical units installed on the client's premises. Entangled Networks solves the challenge of quantum scalability, similar to what Mellanox did with supercomputers, with a quantum interconnect and supporting software that will enable a novel multi-core architecture.

Francis Fukayama famously suggested we were nearing the end of history. The history of the quantum age is just beginning – and we can help to shape it.

About ‘Investors on the Frontlines’

I’m the CEO and Founder of?OurCrowd, the global equity investment platform that gives individual accredited investors access to pre-IPO startup deals alongside top-tier VCs. If you are an investor, private family office or financial advisor, subscribe?here?for my biweekly commentary or follow me on?Twitter. I welcome your comments in the response section below.