By Mackenzie Tatananni

Privately held quantum-computing companies are raking in hundreds of millions of dollars. Wall Street should pay attention.

While private companies represent a longer-term investment opportunity -- it is harder to cash in by selling stock that isn't publicly traded -- that tide of money serves as a vote of confidence in the potential of the technology. Quantum computing is expected to transform sectors ranging from banking to biotechnology.

In a July industry primer, BofA Securities analysts went so far as to say the advent of quantum could be the biggest technological revolution since the discovery of fire. Call the claim outlandish, but one thing is for sure: The race is just starting to heat up.

Consulting firm McKinsey found that public- and private-sector investors poured nearly $2 billion into quantum start-ups globally in 2024, representing a 50% increase from the prior year.

A Finnish start-up was just the latest to benefit from the increasing enthusiasm. Privately held IQM said Wednesday that it had secured $320 million through a funding round led by Ten Eleven Ventures, a U.S.-based venture-capital firm. The latest Series B funding round brings the total raised to date to $600 million.

While IQM may seem like the new kid on the block, it has been around since 2018, making it only slightly younger than publicly traded IonQ. The company has established itself as a leader in Europe, with clients including the Leibniz Supercomputing Centre in Germany. Oak Ridge National Laboratory is a client in the U.S.

While the ins and outs of their approaches differ, IQM is exploring systems that use superconducting qubits, similar to another publicly traded name, Rigetti Computing.

IonQ., Rigetti, and D-Wave Quantum have garnered considerable attention over the past 12 months, which has sent the stocks into the stratosphere. Private companies are turning out to be just as hot.

The French start-up Pasqal announced earlier this year that it had secured EUR100 million ($117 million) in Series B funding through a round led by the Singapore-based investment company Temasek. As of July, Pasqal had raised more than EUR140 million in funding, the company said in a press release.

The start-up has steadily been breaking into the U.S., as evidenced by CEO Loïc Henriet's appearance at Nvidia's annual developer conference in March. This year marked the the chip maker's first Quantum Day, dedicated to showcasing both private and public players in the space.

Another attendee was Alice & Bob, the Paris-based pioneer of "cat qubit" technology, which harnesses a fundamental principle in quantum mechanics -- think Schrodinger's cat -- to suppress errors. The start-up aims to use its patented technology to build the first "useful" computer by 2030, mirroring the goals of peers like IBM and Quantinuum, who are also targeting the end of the decade.

Alice & Bob said in January that it had closed a EUR100 million Series B funding round led in part by Future French Champions, an investment joint venture between the Qatari Investment Authority and the public investment bank Bpifrance.

The spending frenzy isn't limited to Europe. QuEra, a start-up based in Boston, announced in February that it had completed a financing round of more than $230 million, receiving investments from Alphabet's Google and SoftBank.

Other players, including Quantinuum, are gearing up for their trading debuts. A person with direct knowledge of the matter told Barron's an initial public offering could come as early as next year.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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September 03, 2025 16:46 ET (20:46 GMT)

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