Finder Spotlight:
Israeli Quantum Computing Tech
August 29, 2024
Introduction and overview
This spotlight explores trends among Israeli tech companies in quantum computing. Quantum computing, which uses quantum physics principles, allows for more efficient computation than classical computing. While the U.S., China, and the EU are currently leaders in this field, Israel is emerging as a notable player.
Israel’s quantum computing ecosystem is rapidly growing, supported by its innovative technology sector and dynamic startup culture. Based on Startup Nation Finder there are currently about 20 Israeli companies focusing mainly on niche areas like quantum cryptography, aligning with the country’s cybersecurity interests.
However, Israel’s quantum computing sector is increasingly engaging in global collaborations, including partnerships with U.S. tech companies and participation in European research projects. As the field evolves, Israel’s strategic focus on quantum computing is likely to drive new international collaborations, potentially leading to significant breakthroughs in AI, cryptography, and beyond.
Notes about global comparison
While Israel is emerging as a significant player in the quantum computing field, it is essential to view these developments in the context of the global landscape. Quantum computing is a rapidly advancing field, with major contributions from countries like the United States, China, and the European Union.
The United States leads with significant investment and advancements from companies like IBM, Google, and Microsoft. China is progressing with quantum research and development accompanied by a heavy government spending, including secure communication via quantum satellites. The EU’s Quantum Flagship initiative focuses on advancing Quantum technologies, with contributions from Germany, the Netherlands, and France.
Though smaller in scale, 1 out of every 300 Israeli companies is quantum, while in the US this ratio stands at around 1 to 2000.
Higher growth in quantum computing compared to the entire ecosystem
As can be expected from a highly complex field, the number of companies operating in the Israeli quantum computing ecosystem is pretty low – only 18 companies were considered active in 2023. In total, by August 2024, 22 quantum companies were founded in Israel. Four companies were closed during this time. By comparison, in the United States there are 146 quantum companies, according to Pitchbook data.
The second chart highlights the change in number of companies founded, comparing between the quantum sector and the total Israeli ecosystem, normalized to 2018. By August 2024, the amount of active quantum companies tripled, while the number of non-quantum companies stayed roughly the same.
Although this rapid increase may not surprise quantum specialists, it highlights interest in the quantum sector from within the Israeli ecosystem.
Private funding in quantum computing started to rise in 2020
While the Israeli ecosystem experienced a downturn in private funding post-2021, quantum computing continued to grow in 2022, with a decline occurring in 2023 as part of the broader significant decline in ecosystem investments that year. However, by the end of July 2024, the total funding for quantum companies reached $32 million, nearly matching the total funding for the entire year of 2023. This indicates a potential strong rebound in quantum investments in 2024.
Quantum computing tech startups are more likely to raise funds than other tech companies
Since 2020, quantum computing companies are about 3x more likely to raise funds than other companies. Until 2022, the average number of rounds per company in quantum computing was 0.44 compared to the greater ecosystem at 0.15 average. In 2023 this average decreased for both populations, but the ratio between them remained stable (~3). Although 2024 figures are not final yet, the difference between the two groups remained stable as of August 2024.
Prominent quantum computing tech startups
The following are three noteworthy startups in the quantum computing domain:
Quantum Machines develops advanced control systems for quantum computing, offering hardware and software solutions that manage quantum processors. Their Quantum Orchestration Platform enables precise execution of complex quantum algorithms, supporting the scaling of quantum computing in fields like cryptography and machine learning.
Classiq Technologies is a pioneering company in quantum software development, providing a platform that simplifies the creation of quantum algorithms. Their technology allows developers to design, analyze, and optimize quantum circuits at a higher abstraction level, making quantum computing more accessible and practical for solving real-world problems. Classiq’s platform is designed to bridge the gap between quantum hardware and software, enabling businesses to leverage quantum computing’s potential in areas like optimization, finance, and drug discovery.
Quantum Source Labs is an innovative R&D company focused on developing cutting-edge quantum computing technologies. The company specializes in creating scalable quantum processors and quantum algorithms, aiming to solve complex computational problems across various industries. Their mission is to accelerate the transition to quantum-powered solutions, enabling breakthroughs in fields such as cryptography, material science, and artificial intelligence.
Summary
The future of quantum computing in Israel is poised for significant growth, despite the field being relatively new in the local ecosystem. Israel’s strong foundation in technology and innovation, combined with its dynamic startup culture, positions it to become a key player in the global quantum landscape. As Israeli companies and research institutions increasingly invest in quantum technologies and expand international collaboration, the country is likely to see rapid advancements in quantum hardware, software, and applications. This emerging field offers Israel the opportunity to lead in areas like cryptography, artificial intelligence, and optimization, fostering new collaborations and driving economic growth in the coming years.