A Burnaby, B.C., company that is hoping to revolutionize computing by harnessing the mysterious power of quantum physics has quietly raised $21-million (U.S.) in advance of what it anticipates will be a significant funding round next year.
D-Wave Systems Inc. raised its latest round of financing last spring from a group of investors led by Fidelity Investments – a frequent backer of early-stage technology companies – and PSP Investments, the Montreal-based public-sector pension investment manager, according to sources. The company did not announce the funding and would not confirm the names of the new investors.
PSP is a surprising backer as it keeps a low profile and is not a large investor in the smaller technology ventures. A PSP spokeswoman said the pension giant, with $117-billion in assets under management, "does not currently pursue any strategy dedicated to investments in startup companies" and only "sometimes invest[s] in these companies on a very opportunistic basis." She declined to comment further.
D-Wave chief executive officer Vern Brownell said that after the recent financing, "we are contemplating raising a fairly large round of private capital" next year. He did not disclose the anticipated amount, but industry sources say the target amount should exceed $50-million. Mr. Brownell said an initial public offering is unlikely "in the near future."
Sixteen-year-old D-Wave has raised more than $200-million (Canadian) to date from a blue-chip roster of investors that includes Amazon founder Jeff Bezos, Goldman Sachs, U.S. venture capital firm Draper Fisher Jurvetson, the Central Intelligence Agency's venture capital arm, In-Q-Tel, and BDC Capital.
The company is developing machines that it says will one day be vastly more powerful than the most sophisticated computers on the planet, allowing programmers and researchers to solve complex problems beyond the capabilities of current technology, such as climate modelling, building better drugs for cancer and helping Wall Street banks run better risk simulations.
"All of these are very impactful problems that we believe [this technology] is perfect for," Mr. Brownell said. "We're trying to build an important computational resource for mankind to solve problems that can't be solved using classical computing techniques."
D-Wave's quantum computers harness the power of subatomic particles in tiny loops of niobium located in their chips – supercooled to reach the coldest temperatures in the universe – to help perform calculations that would take the world's most powerful computers millenniums to run. The scientific explanation behind the machine is beyond the realm of comprehension for most – even Albert Einstein was flummoxed by quantum physics – including the notion that the conductors can be in multiple states at once, implying, by extension, that there are multiple universes.
"This is the most innovative and complex thing going on in the planet, never mind Canada," Mr. Brownell said.
Although some scientists dispute whether D-Wave's machines are actually quantum computers, the company has sold machines to a Google/NASA consortium, Lockheed Martin Corp. and the Los Alamos National Laboratory. Google announced last December that it had used a D-Wave machine to perform calculations 100 million times faster than any current computers. The company is eyeing sales in Europe next, but has no sales in Canada.
Mr. Brownell said he would like to see the federal government finance Canadian universities to buy his machines – Ottawa has already provided funds to the University of Waterloo's Institute for Quantum Computing – as part of its national innovation strategy. That would enable researchers "to develop applications … in medicine, finance, energy and clean tech. We'd love to enable that in Canada. Right now, we're enabling it in the U.S. because our customers are in the U.S."
D-Wave is now looking to build out the software running on the machine to make it more usable by researchers and programmers looking to build applications.