A new €15 million fund has been launched to help quantum technology research in the Netherlands transform into venture capital investable startups.
Supported by Quantum Delta NL (QDNL), a foundation that aims to boost and scale the Dutch quantum ecosystem, the so-called QDNL Participations Fund has a dual focus: startups in the early stages of the sector and research teams that have previously worked on promising quantum technologies set up as startups.
In the first case, the funding is up to 1.5 million euros – with the foundation usually leading the investment round. In the second case, the fund is offering researchers €50,000 via a SAFE Note agreement, meaning the funding will convert to an equity investment once the startup is ready to move forward as a company.
“We get in early and provide objective and patient capital.
The fund expects around 10-15 SAFE note investments (of 50,000 euros) and around 5-10 seed investments (of up to 1.5 million euros), Ton van ‘t Noordende, managing director of QDNL Participations, told TNW . “We get in early and can provide objective and patient capital.”
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The fund plans to invest in companies across the quantum sector, including hardware, sensors, entanglement and overlay technologies, as well as communications and essential utility components.
According to QDNL’s own data, 32.7% of sector funds went to software, while 64.4% was invested in hardware and almost 3% in hybrid hardware-software.“We expect to follow this trend,” said Van ‘t Noordende.
The research teams looking to enter the start-up world mainly come from leading Dutch universities, including TU Delft, Eindhoven University of Technology, University of Tweente, Leiden University and the University of Amsterdam.
“Academia spin-off remains a bottleneck for researcher-driven entrepreneurship in Europe.
In addition to QDNL investments, the foundation has also launched a support program for aspiring quantum technology founders called Infinity. This aims to help Dutch academic researchers navigate the university’s spin-out process and launch their first round of funding by giving them access to a network of more than 800 deeptech investors worldwide.
Infinity is offered as an “on call” service whenever it is needed and is free of charge.
“We believe there is tremendous untapped potential as billions of values in new innovations go unshared and uncommercialized. Academic segregation remains a bottleneck for researcher-driven entrepreneurship in Europe,” added Van ‘t Noordende.
Closing the funding gap in quantum technology
Fundraising is “the biggest challenge” for Dutch deep-tech startups, Van ‘t Noordende told TNW. “The (financing) gap is not only in the Netherlands, but across Europe. Investments from startups based in the US, UK and Canada account for about 80% of the value of all private investments in quantum technology and about 62% of all private rounds.”
As he further explained, the bulk of the funding is “directed towards and through the Series A phase,” while several factors result in a lack of early-stage funding. Not only is there a lack of investors specialized in early-stage investing, but it is also challenging for investors outside the scientific communities to know “where to invest or how to provide longer-term support.”
QDNL Participations aims to address this issue by involving a global network of leading quantum technology researchers in the process, who are actively involved in the early stages of a startup and could later become scientific advisors or board members.
“Our fund eliminates the risks of what is seen as a ‘wild bet’ and, through direct intervention, increases the likelihood of long-term impact and financial success,” added Van ‘t Noordende.
According to Freeke Heijman, co-founder and director of ecosystem development at QDNL, the goal of Infinity and the new fund is to enable the sustainable growth of quantum startups in the Netherlands so that they can compete in the global market.
And with the quantum technology market expected to be worth over €3 billion by 2030, adequate funding to build resilient ecosystems will be critical.