D-Wave Systems, a Canadian quantum computing startup, is merging with DPCM Capital, a special purpose acquisition company (SPAC), in a $1.6 billion deal that will take it public. The combined company will receive $3o0 million in gross proceeds from DPCM Capital’s trust account, as well as $40 million in gross proceeds from a group of strategic and institutional investors participating in the transaction.
D-Wave plans to utilize the funds to speed up the delivery of in-production quantum applications for blue-chip clients and to expand on the more than 200 U.S. patents it has been given since its establishment in 1999. The deal would also mark a turning point in Canada’s creation of a strong quantum computing ecosystem. Ground-breaking research and development (R&D) will continue to be centered at D-Wave’s British Columbia-based Quantum Center for Excellence.
The next generation of annealing quantum computers, as well as the advancement of D-Wave’s gate-model program and the enhancement of D-Wave’s Leap quantum cloud service, hybrid solvers, and software development tools, will be the emphasis of D-R&D. D-Wave expects to expand its worldwide reach outside the United States, Canada, Europe, Japan, Singapore, and Australia in the next years.
“This marks an inflection point signaling that quantum computing has moved beyond just theory and government-funded research to deliver commercial quantum solutions for business,” said Alan Baratz, Chief Executive Officer (CEO) at D-Wave. “D-Wave, along with DPCM Capital and our new and long-term investors PSP Investments, Goldman Sachs Asset Management (Goldman Sachs), NEC Corporation, Yorkville Advisors, and Aegis Group Partners, collectively believe that this isn’t a moment of hope or science. Instead, we believe this event represents a moment of practical value creation for customers and for investors. We are working with our customers to identify applications with high likelihood of quantum value and to translate those problems to run on the quantum computer and then validate that value. We expect this ‘value creation and validation’ to accelerate as an increasing number of diverse use cases emerge – creating a robust cycle of product delivery, application development, and market growth.”
With headquarters and the Quantum Engineering Center of Excellence based near Vancouver, Canada, D-Wave’s U.S. operations are based in Palo Alto, California. D-Wave has a blue-chip investor base that includes PSP Investments, Goldman Sachs, BDC Capital, NEC Corp., Aegis Group Partners, and In-Q-Tel.
‘Finding Solutions to Problems’
Today’s demand for quantum computing is real and it’s growing, according to DPCM Capital and D-Wave. A 2020 analysis by 451 Research, a market intelligence organization owned by S&P Global, shows that 31% of businesses polled said they have abandoned complicated challenges due to the time necessary to resolve them. According to the survey, 39% of businesses are presently experimenting with quantum computing, and 81% expect to have quantum use cases in the next three years.
“While quantum computing is complex, its value and benefits are quite simple: finding solutions to problems that couldn’t be previously solved, or solving problems faster with more optimal results,” said Emil Michael, Chief Executive Officer (CEO) at DPCM Capital. “D-Wave is at the forefront of developing this market, already delivering the significant benefits of quantum computing to major companies across the globe. As the only quantum computing company in the world that is building both annealing and gate-model quantum computers, D-Wave will have access to the full projected $150 billion quantum computing total addressable market (TAM). With the near-term TAM expected to exceed $1 billion, and the potential for the TAM to rapidly expand as annealing quantum computing applications mature and gate-model applications emerge, we are confident that D-Wave will continue to deliver long-term value to stockholders by accelerating the commercial quantum computing market.”
DPCM Capital is a special purpose acquisition company led by Chairman and CEO Emil Michael, formed for the purpose of effecting a merger. A team of entrepreneurs and operators is affiliated with the SPAC at the board, management, and advisory levels, including Eric Schmidt, the former CEO of Google, Betsy Atkins, a world-class governance expert and enterprise entrepreneur, and Denmark West, a founding member of Microsoft’s Xbox team.