Last week ID Quantique (IDQ), a Geneva-based company that develops commercial encryption technologies based on the principles of quantum physics, raised $5.6 million in funding from Quantum Wave Capital (QWave Capital), a Moscow-based venture fund operating internationally.
QWave Capital gained a significant but minority stake in IDQ thanks to the funding, $4.5 million of which was a direct investment in the company and $1.1 million of which was used to purchase shares from another shareholder.
IDQ is one of the major actors on the $20 billion encrypted communication market. Its commercialization of Quantum Key Distribution (QKD) technology allows one party to send a cryptographic key encoded with photons to another party. If a third party tries to intercept this key, it will be altered, therefore notifying the sender and receiver and thus aborting the transfer.
Banks, governments and other companies in Europe have already adopted IDQ’s Quantum Key Distribution. Earlier this month, the US R&D giant Battelle created the first commercial quantum key distribution protected network in the United States using IDQ’s technology. The technology may also be used in the near future in a variety of other domains, such as healthcare or electronic voting. No Russian public or private company currently uses IDQ’s technologies, according to QWave Capital.
“ID Quantique and Quantum Key Distribution are the future of communication in industries where security and confidentiality are mission-critical,” said Dr. Serguei Kouzmine, Managing Partner at QWave Capital and President of the Russian Quantum Center.
The funds will be used to expand IDQ’s marketing activities and business operations and to develop new products.
This investment is particularly favorable for IDQ’s commercial activities due to the scientific expertise of the QWave advisory board, which includes professors from Harvard and other major quantum research centers. “Having investors with strong physics background and multiple connections in quantum research institutions will help us better navigate the uncharted waters of bringing quantum technology to market, and become leaders in quantum innovation,” according to ID Quantique CEO Grégoire Ribordy.
ID Quantique was launched in 2001 and currently develops quantum encryption, conventional encryption, random number generation and scientific instrumentation products.
Created in December 2012, QWave Capital is a $100 million fund that focuses on investments in early stage private companies that use the principles of quantum mechanics and materials science. The IDQ investment is QWave Capital’s fourth in less than a year. QWave Capital founder Sergey Belousov, a Russian serial high tech entrepreneur, and his partners also own the Runa Capital Fund.
Sources: ID Quantique, CNews.ru, Business Insider, Startupticker.ch
