The Switzerland-based venture firm, which expanded to the city-state last year, is now raising a US$150 million fund
[SINGAPORE] Imagine taking just minutes to solve a problem that would have taken the world’s most powerful supercomputer 10,000 years – revolutionising medicine, energy, finance and many other fields. This is the promise of quantum technology that investors are making big bets on, especially in the US.
But one investor is looking for investment opportunities in two younger markets: Singapore and India.
Switzerland-based QAI Ventures is drawn by both countries’ rich quantum research ecosystems and tech talent, the firm’s founder and chief executive Alexandra Beckstein told The Business Times.
QAI last year launched its Asia-Pacific headquarters in Singapore, while unveiling an accelerator programme for startups and plans for venture building.
“We’re not only aiming to invest into Singaporean startups, we also aim to build three companies in the first year in Singapore, out of the (local) quantum ecosystem and the research institutes. We also aim to bring talent from abroad to Singapore,” said Beckstein.
Quantum technology is a nascent field where the mysterious properties of sub-atomic particles are harnessed for computing and other applications. For instance, researchers are studying the use of a technology known as quantum key distribution to create ultra-secure networks.
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Beckstein, whose background is in geoscience, was drawn to investing in quantum tech because of the vast potential for innovation. Her three-year-old firm has an early-stage fund of 20 million Swiss francs (S$32.9 million), backed by the family behind Schindler Group, the Swiss elevator and escalator company.
QAI thus far invested in 27 startups – such as Finland-based SemiQon, which is developing silicon-based quantum processors, and Munich Quantum Instruments, which builds quantum sensors.
The venture firm is now raising a new US$150 million fund to make bets on later-stage startups, with cheque sizes ranging from between US$8 million and US$12 million. This fund is also backed by the Schindler family.
Beckstein is targeting a first close of the new fund in Q1 this year. She sees plenty of interest from family offices and corporate venture capital funds in quantum startups.
Hunting in new markets
Singapore and India will be fresh terrain for QAI to sniff out opportunities, and Beckstein is optimistic about both governments’ commitment to quantum tech development.
For instance, Singapore invested in quantum research as early as 2007, and now boasts several homegrown startups in the field.
In 2024, the government announced that it would invest some S$300 million in quantum research and talent over the next five years, on top of the over S$400 million already invested. Prime Minister Lawrence Wong also cited quantum tech as a growth area in this year’s Budget.
Beckstein cites such developments – as well as Singapore’s strength in intellectual property – as pull factors for QAI.
Likewise, India launched a national quantum mission in 2023 at a cost of over 60 billion rupees (S$836.4 million). It hopes to incubate at least 10 quantum startups with over US$100 million in cumulative revenue each by 2035.
“They want to reach 1,000 quantum patents filed annually from 2030 onwards, and they want to have 50 per cent of the global market share in quantum software,” noted Beckstein, adding that the country has a strong talent base, including over 170 quantum professors.
“India will not be a leader in quantum hardware, but in software, and they are now paving the way to go there,” she said.
What QAI hopes to provide startups in both markets is not just capital, but also access to industry partnerships.
“If you just build the hardware and ask the industry to work on this, this is not innovation. You need to work with the companies that are building on the infrastructure that you provide. You need an ecosystem,” she said.
“More and more acquisitions”
QAI’s investment appetite comes as venture capital deals have slowed down globally, in the face of economic uncertainty. That said, Beckstein said that investment sentiment for quantum tech has not cooled down, but simply shifted from many smaller bets to fewer, but bigger bets.
She still sees ample opportunity to make good returns on investments, as larger tech companies are on the lookout for quantum startups to buy.
For instance, Nasdaq-listed BTQ Technologies last year exercised an option to acquire QAI’s portfolio company QPerfect, which develops software to simulate quantum systems.
“We see more and more acquisitions coming up this year. We also see that the budgets of big hardware players like IBM are huge and they will be used to acquire younger companies,” she said.
“Not all hardware providers are developing the technology within; they are looking more at what the young companies, the startups are doing and what technologies (they) can acquire.”
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