Quantum computing has emerged as one of the most promising and exciting technological fields of the 21st century. With the potential to revolutionize industries from drug discovery to cryptography, quantum computing startups have proliferated globally over the past decade. One region that has firmly established itself as a leading quantum hub is Waterloo, Canada. Known colloquially as ‘Quantum Valley’, the Waterloo region is home to numerous quantum startups and research groups, underpinned by sizable investments by both the public and private sectors. This article will examine the rise of Quantum Valley and analyze the factors that have enabled Canada to become the premier destination for quantum computing companies in North America.
Quantum computing market projected to reach $65B globally by 2030
Multiple market research reports indicate that the quantum computing market could reach up to $65 billion globally by 2030. PwC expects the market to grow to $30 billion by 2026 for hardware alone. Meanwhile, Boston Consulting Group predicts quantum will create $450 billion to $850 billion in annual value globally within the next 15-30 years. Pitchbook data shows that quantum computing startups raised over $1 billion in VC funding globally in 2021, more than double the amount raised in 2020. As one of the top global hubs for quantum computing R&D and commercialization, Quantum Valley is poised to capture a sizable share of this market opportunity.
Waterloo ranked #2 globally for quantum computing patents
According a study by the Quantum Industry Canada, the University of Waterloo and affiliated startups accounted for 12% of global quantum computing patents between 2012-2017, second only to IBM. This prolific patent activity reflects Waterloo’s deep R&D capabilities and success in translating lab research into commercial technologies. Key Waterloo-based players driving innovation include the Institute for Quantum Computing (IQC), Quantum Valley Ideas Lab, and over 30 quantum startups that have spun out from IQC and University of Waterloo alumni and researchers.
Over $1B invested into Quantum Valley ecosystem since 2000
Toronto-based Quantum Valley Investments estimates that over $1 billion has been invested into Waterloo’s quantum ecosystem since 2000, with 75% coming from the public sector. This includes funding for academic quantum research at University of Waterloo and Quantum Valley Ideas Lab, building quantum infrastructure like IQC facilities, and co-investments into quantum startups alongside VCs. The Ontario provincial government has been a major backer through innovation funds like the Ontario Quantum Computing Innovation Program which awarded $35 million earlier this year.
Quantum hardware startups attracting major VC funding
While much of the early funding went into R&D, VCs are now actively targeting Waterloo’s most promising quantum hardware startups. Recent examples include PsiQuantum ($450 million Series D round), Xanadu ($145 million Series B round), and Quantum Brilliance ($22 million seed round). There is a clear momentum shift from academic research to building commercial prototype quantum computers. Quantum Valley has cultivated a strong pipeline of hardware startups, putting Canada in prime position to be a future supplier of the quantum machines that organizations will be clamoring to get their hands on.
In summary, the Waterloo region has firmly established itself as Canada’s quantum computing hub and a top destination globally for quantum companies and investment. With its unparalleled quantum research ecosystem and progress in translating lab research into commercial technologies, Quantum Valley offers tremendous advantages that position Canada to be a leader in the second quantum revolution.