Sydney startup Q-CTRL has secured $US15 million ($21.8 million) in funding, but pitching a quantum computing solution is even harder than it sounds.
The funding round was led by Aussie VC and existing investor Square Peg Capital, and Silicon Valley VC firm Sierra Ventures also contributed.
Founded in 2017, Q-CTRL provides infrastructure software to aid the development of quantum computers as well as solutions to support quantum computers — specifically protecting fragile quantum computing hardware against noise and errors, which cause instability and failures.
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While the raising experience was, obviously, ultimately a positive one, Q-CTRL founder Michael Biercuk says it was very different from the funding round prior. The startup raised an undisclosed amount of seed funding in July last year.
“People are not just flinging money at you,” Biercuk says.
Previously, pretty much everyone they pitched “wanted in”, he adds.
“This time, we had a bunch of ‘no’s … and pretty much every one of those ‘no’s said they don’t know when quantum computing is really going to be ready.”
Rather than being disheartened, the founder saw this as a positive thing, treating it as a kind of filter.
“The people who don’t have the commitment, or the stomach, for a longer-term investment, they’re not the right investors for us,” he says.
Excited, entertained, even bemused
But pitching a quantum computing startup is not as simple as pitching an app, a fintech or a dog-sitting platform. The conversations Biercuk was having with investors were lengthy and detailed.
“The conversations we had that progressed beyond very preliminary discussions were all exceptionally technical.”
The founder had more than two dozen “multi-hour” meetings with Square Peg, where they would deep dive into how the technology works, how fast the field is moving, any new literature in the space, and the bearing all of this could have on the market.
“It was very, very technical, detailed discussion all the way through,” Biercuk says.
“Which, frankly, was good, because it showed our lead investors’ deep commitment to really having an understanding of our field.”
It wasn’t about proving their point, or that the technology worked, he explains. It was more about cutting through the media hype and misconceptions and figuring out whether this was investible in line with Square Peg’s strategy.
And, while the investors were mindblown at times, they powered through to try to understand the prospect that was in front of them.
“People would be very excited and entertained and even bemused at times,” Biercuk says.
But, the investors put in a lot of time to become “as educated as they could about the technology, and to sort fact from fiction, hype from reality”, he adds.
“I personally, professionally, really value the commitment that they made.”
And, of course, Biercuk predicts that commitment will pay off. In the short term, he’s looking to expand the product offering, the client base, and technical team, and to grow Q-CTRL’s footprint in the US.
But, give it some time, and Biercuk believes Q-CTRL could be a major player in the future tech scene.
In 10 to 15 years’ time, “we aim to be the trusted solution provider of quantum control solutions for all quantum technologies”, he says.
“That’s all potential applications, from computing through to sensing to medical imaging — being a diversified, independent, very large and respected technical organisation which really makes quantum technology work.”
The right people, the right story
For founders working on specialist or complex tech, the pitching process can be difficult.
“Find the right investors,” Biercuk advises.
“Find people who understand and are comfortable in the sector in which you want to operate.”
It may be tempting to accept money from anyone who wants to give it to you, regardless of their expertise.
“But ultimately, I think that will burn you.”
Equally, Biercuk stresses the importance of being able to tell your story.
“Even if you’re doing something very technical, it’s essential you connect with your audience,” he says.
“Whether it’s an audience of customers, or an audience of investors, or a scientific meeting audience, you need to be able to connect with them, and telling that story is an essential part of your pitch.”