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D-Wave to go public after $1.2 billion merger deal with SPAC

Quantum computing biz takes the easy route to IPO and future capital

Quantum computer company D-Wave will go public after reaching a deal to merge with the SPAC (special purpose acquisition company) DPCM Capital, in a deal that values the advanced-computing firm at $1.2bn.

The private biz will change its name to D-Wave Quantum Inc. and will receive about $340m in funding. The newly formed company will be listed on the New York Stock Exchange under ticker symbol QBTS, and the deal will close in the second quarter this year, as SPAC deals typically offer a faster route to market than the traditional IPO method.

Quantum computers are still under development, but are being hyped for the ability to do things like drug discovery substantially faster than today's computers and possibly break current encryption systems. But IT leaders in Fortune 500 companies are approaching it with caution, and experimenting with the systems without making significant financial commitments.

Quantum computers encode information in qubits, and store exponentially more information in the form of 1s, 0s or a superposition of both, and evaluate data simultaneously, while classical computers evaluate data sequentially.

D-Wave has been around for a decade selling its quantum annealing system, which is designed to solve specific computing problems. The system delivers a set of possible outcomes after a magnetic field is applied to perform qubit operations.

The company last year announced it was also building a gate-model system to solve substantially larger problems like differential equations, which weren't designed to be handled by the annealing systems.

D-Wave's gate-model will be based on flux qubits, the same as used in the annealing system. The error-corrected system will put the company in competition with IBM and Google, which use transmon qubits in their quantum computers.

The delivery of the gate-model system is expected by 2023 or 2024. D-Wave has so far raised nearly $300m capital through various rounds, and the SPAC deal gives it more financial armor to chase after loftier goals.

D-Wave already has customers in the finance, pharmaceutical and logistics market, DPCM Capital said in a filing with the US Securities and Exchange Commission. It also asserted that the quantum computing market is worth up to $5bn in the short term, and up to $50bn in the mid-tier term.

The D-Wave SPAC deal follows the footsteps of another quantum hardware company Rigetti, which announced a $1.5bn merger with Supernova Partners Acquisition Company II, a finance house focusing on strategic acquisitions.

Investment deals from SPAC firms tend to be highly speculative, so DPCM will be in for a big-time reward if D-Wave emerges successful. Quantum computers are also still viewed with a healthy level of skepticism by some.

Last year was a funding bonanza for quantum computing startups, which raked in $1.02bn in venture capital investments without factoring in the Rigetti deal, according to data provided to The Register by Pitchbook. That was a significant increase from $684m invested by VC firms in 2020, and $188m in 2019. ®

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