Analyst(s): Dr. Bob Sutor
Publication Date: January 22, 2025
During December 2024, the stock prices of public quantum computing companies IonQ, Rigetti Computing, and D-Wave Quantum rose dramatically by hundreds of percent despite the latter two publishing lackluster earnings results for the third quarter. Following remarks by NVIDIA CEO Jensen Huang saying that useful quantum computing was at least 15 to 30 years away, these stocks crashed. They each recovered somewhat, but how did this affect small quantum startups’ investment environment? Three such companies closed early-stage rounds despite the turmoil.
What is Covered in this Article:
- The quantum stock speculation bubble of ’24
- Words can hurt when it comes to the timing of Practical Quantum Advantage and stock prices
- The strength of the funding environment for early-stage quantum companies
- Is it getting crowded here, or is it just me?
The News: In the three-week period from the very end of December to the middle of January, the quantum computing companies Qolab, SEEQC, and Quantum Brilliance raised a total of USD 66 million in early-stage investment funding rounds.
Quantum in Context: Early-Stage Startups Are Still Finding Investors
Analyst Take: Getting investment money for a startup can be very difficult, and it is especially hard for a technology like quantum computing, where we do not know when it will be ready for production use. This doesn’t stop people from guessing. If you are a startup and tell a potential investor that your product will not have significant value for 10 years, will you get the check? Doesn’t it sound better if you say three to five years? Suppose you are a company that sells high-performance computing systems and processors. Might you stave off serious competitive investment by saying it could take decades to reach Practical Quantum Advantage?
Despite a volatile stock market for quantum computing stocks in December and early January, three companies got substantial early-stage funding. This is a good sign of the resilience of the quantum investment ecosystem, though it does not guarantee the eventual success of these and dozens of other companies all going for the same quantum pot of gold.
The Rise and Fall of the Quantum Stock Empire
Let’s begin with some numbers.
On November 1, 2024, the closing price of D-Wave Quantum was $1.04, IonQ was $14.85, and Rigetti Computing was $1.23. The Futurum Group published my Research Note “Quantum in Context: D-Wave, IonQ, and Rigetti 3Q2024 Financial Results” on November 21. While IonQ had a good quarter, nothing indicated that D-Wave or Rigetti Computing was due for a stock surge.
Google announced its quantum Willow chip on December 9. They showed impressive quantum microwave control technology improvements and re-announced, from August, a significant result regarding an older form of quantum error correction. They also discussed the multiverse and how quickly they could solve a completely useless problem. The announcements got broad media attention, though I would say technology-focused comments from non-Google quantum experts were largely missing.
On January 6, 2025, the closing prices were $20.25, $51.10, and $20.78, respectively.
During a panel discussion in Las Vegas at CES, NVIDIA CEO Jensen Huang said:
“If you said 15 years for very useful quantum computers, that would probably be on the early side. If you said 30, it’s probably on the late side. But if you picked 20, I think a whole bunch of us would believe it.”
Two days later, on January 8, the lowest daily prices were $4.90, $26.16, and $9.27 for D-Wave, IonQ, and Rigetti Computing, respectively.
Various business leaders, pundits, and quantum enthusiasts supported or contradicted Huang’s remarks. Their motivations were mixed and not always well informed. There were many “I don’t know anything about this, but here is my opinion” comments. In any case, the quantum computing financial environment was and is volatile.
Companies Get Early-Stage Funding
Amid this craziness, quantum technology startups are seeking investment. Three recently announced successful early round funding:
- Qolab announced they had gotten “more than” $16 million in their Series A round. The company is noted for having superconducting wizard John Martinis of Google “Quantum Supremacy” fame as its CTO. It contributed to the survey paper “How to Build a Quantum Supercomputer: Scaling Challenges and Opportunities.” They need to move beyond this quantum how-to guide to demonstrating quantum computers with industry-leading specs.
- Quantum Brilliance, which focuses on quantum diamond technology for computing, networking, and sensing, received $20 million in its Series A. Third parties now manufacture the diamonds they use, but the company will use some of the new cash to build its own foundry. I think the jury is still out on the scalability of the diamond approach for computing, but it looks very promising for sensing and networking.
- Finally, SEEQC raised $30 million for its quantum-classical superconducting chip approach. It claims that its design is less complicated than other architectures.
The Crowded Quantum Computing Hardware Industry
These three companies manufacture quantum processing units (QPUs). According to the latest Futurum Intelligence, 69 such companies in 18 countries use 10 different modalities. Superconducting and diamond are but two of these modalities. It’s certainly impressive that the companies got this funding, but the quantum computing industry is overdue for consolidation and compression.
What to Watch:
- When will Qolab demonstrate working hardware with specs surpassing what IBM and Google have shown for years?
- Will nitrogen-vacancy diamond approaches such as that from Quantum Brilliance scale for production quantum computing, or will it find a better home in quantum communications hardware?
- Will SEEQC find a large enough market for its components versus becoming purely focused on its own offerings?
For additional details, see
- the “Qolab Secures Over $16.0 Million in Series A Financing Led by Octave Ventures with Co-Investment by Development Bank of Japan Inc., Wisconsin Alumni Research Foundation, and Phoenix Venture Partners to Accelerate Innovation in Superconducting Quantum Computing” press release,
- the “Quantum Brilliance Raises USD $20 Million in Series A Funding Round” press release, and
- the “SEEQC Raises $30 million to Advance Quantum Computing Platforms” press release.
Disclosures: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. Bob Sutor is a former employee of IBM and has an equity position in the company. The analyst has a small equity position in Google. The analyst has no equity position in any other company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
Other insights from The Futurum Group:
Quantum in Context: A Qubit Primer
Is Quantum Computing Languishing? – Report Summary
Quantum in Context: D-Wave, IonQ, and Rigetti 3Q2024 Financial Results
Quantum in Context: Money Plus or Minus – QuEra, Q-CTRL, Zapata AI
Author Information
Dr. Bob Sutor is a Consulting Analyst for Futurum and an expert in quantum technologies with 40+ years of experience. He is an accomplished author of the quantum computing book Dancing with Qubits, Second Edition. Bob is dedicated to evolving quantum to help solve society's critical computational problems. For Futurum, he helps clients understand sophisticated technologies and how to make the best use of them for success in their organizations and industries.
He’s the author of a book about quantum computing called Dancing with Qubits, which was published in 2019, with the Second Edition released in March 2024. He is also the author of the 2021 book Dancing with Python, an introduction to Python coding for classical and quantum computing. Areas in which he’s worked: quantum computing, AI, blockchain, mathematics and mathematical software, Linux, open source, standards management, product management and marketing, computer algebra, and web standards.
