D-Wave Secures $40M And Plans A $120M Project
Mar 14, 2021
Burnaby, BC-based D-Wave Systems has secured $40 million from the Government of Canada to support its quantum computing systems and software.
The funding is set to be announced Thursday afternoon by the recently appointed Minister of Innovation, François-Philippe Champagne.
The $40 million in government funding comes in the form of Strategic Innovation Fund (SIF) financing. It will support a $120 million project D-Wave is working on to develop quantum computer hardware and software systems.
The goal behind the government capital and project is to ensure Canada “remains at the forefront of quantum technology development” and help D-Wave prove the advantage of quantum technology over classical computers. The project has also received assistance from the Sustainable Development Technologies Canada program and the Government of British Columbia, though dollar figures were not disclosed.
Champagne called the investment a key part of the Government of Canada’s plan for post-pandemic economy recovery.
Alan Baratz, CEO of D-Wave, noted the company plans to use the financing to continue its focus on the prototyping, development, full-scale implementation, and deployment of quantum computing systems.
D-Wave is a longtime staple of the Canadian tech ecosystem, having been founded in 1999. It was the first company to offer a commercially available quantum computer. Despite its more than 20 years of operation, the company has struggled of late, with The Globe and Mail reporting the government funding follows a “year of reset expectations” for D-Wave.
Despite its long history, which has seen more than $300 million USD raised to date, D-Wave has struggled to become a sustainable company and faced increased competition from the likes of Google, Microsoft, Intel, and IBM, among others. The Globe reported last year the company had secured just $75 million USD in customer contracts over its lifespan.
The company also reportedly raised $40 million in financing last year, which was part of a capital restructuring and cut D-Wave’s valuation to less than $170 million USD from $450 million USD. This led to long-time investors, such as the venture arm of the US Central Intelligence Agency venture and Amazon CEO Jeff Bezos, seeing their stakes fall significantly.
Last year also saw the replacement of longtime D-Wave CEO Vern Brownell, with Baratz reportedly stepping in to step up the company’s commercialization efforts. The company also made changes to other top executives and long-time board members.
Baratz expressed optimism in a statement about the funding, noting D-Wave will “continue to build a global quantum ecosystem showcasing the power of Canadian innovation.”
It is notable, though, that D-Wave received the funding through SIF, which typically comes with prerequisites and targeted goals recipients have to meet. In the past, companies like North and Element AI received SIF capital only to have it stripped away when targets were not met or layoffs were made. Element AI lost its SIF funding after being acquired by ServiceNow and North, which has since been acquired by Google, had its funding stripped when it laid off 150 staff in 2019.