Those who are not shocked when they first come across quantum theory cannot possibly have understood it.

Niels Bohr

Danish physicist who won the Nobel Prize in 1922

Quantum technologies have the potential to solve the major challenges of our time — from tracking future pandemics or designing new materials and new drugs, to modelling extreme weather patterns and contributing to disaster relief, to enhancing the ability to detect movement below ground and under water, to other uses not yet imagined. This might seem like a theme for the next sci-fi movie, but the truth is that futuristic quantum technologies are fast becoming reality.

A quarter of all companies working on quantum technologies are located in the European Union. But many of these companies face difficulties getting loans to expand and flourish.

Today, the European Union is seeing its best opportunity in decades to become the global leader in an industry that is going to disrupt everything, from artificial intelligence to cryptography: the quantum industry,” says Enrique Lizaso, founder of Mulitiverse Computing. “If we want to have our companies, patents and positions become EU leaders in the coming years, that is in our hands. We have to commit funds for our companies to scale up fast and thrive.

Some initiatives to boost Europe’s quantum industry are underway, but the sector needs more help. Only 5% of global funding for quantum technology goes to Europe.

What is quantum technology?

Quantum technology employs the principles of quantum physics to make computing faster, measurements more accurate and communications more secure. Most quantum technology models are based on quantum bits, or qubits. These are similar to binary bits in classical computing, but they also have other properties that make them faster, more flexible and more reliable.

In recent years, EIB Advisory has been studying the sector’s ability to get loans or other financial help, providing insights and suggestions to increase investments in quantum technology companies. An EIB Advisory study published in 2023 found that these companies struggle to expand or get financing due to investors’ lack of knowledge about the sector, or because of a lack of commercial partners. Quantum technology companies often cannot find finance because they lack a proven track record, do not have solid and established business models, lack customer relations staff, and have difficulty demonstrating the commercial potential of their products.

Public and private institutions can bridge the funding and knowledge gaps and make Europe a global leader in quantum technologies. Public financing has an important role to play, for instance, in developing supportive infrastructure like pilot lines, testing facilities, and quantum cloud computing or communication networks. But the private sector must match the significant financing coming from the public side, as a vibrant quantum technology industry in Europe will require public and private funding together.

The European Union has earmarked €6.1 billion in funding for quantum technologies from 2021 to 2027. The EIB Group is helping the sector in various ways, including with venture debt, equity investments and advisory services to guide investors in the quantum industry and increase the use of quantum technologies. This is the objective of the EIB Advisory’s quantum finance lab.

Created in October 2023, the finance lab organises regular dialogue among various groups to find creative ways to meet the rapidly evolving needs of the quantum industry. The lab brings together quantum entrepreneurs, corporate representatives from key industries, investors, academics and research and technology organisations, policymakers and regulators.

The lab will help quantum technology companies to find investors and raise funds to support product development, with the help of advisory support from the EIB, not only to assess bankability and improve investment readiness, but also to take ideas to market: drafting business plans, pitches and funding strategies.

The quantum finance lab workshop we organised in 2023 was very productive,” says Alejandro Raboso Campos, the EIB finance advisor who worked on the study and helped set up the lab. “We can see the benefit of sharing knowledge with other investors and stakeholders in the quantum industry to help companies, and also to better understand their needs. The lab will generate new leads for EIB Group lending and attract more finance to the sector. We are accelerating the path to market and smoothing the way.”

The feedback from companies and stakeholders in the lab is highly beneficial according to Raphael Fauveau, chief financial officer at Pasqal, a French quantum technology company. “The lab will allow us to investigate new avenues of funding for our company that include private capital and public support, but also non-financial resources. It is very useful for us to link with other stakeholders and peers to exchange on our common challenges and benefit from the advisory support of the EIB to further develop the ecosystem.

In 2024, the quantum finance lab will continue to attract more finance to the quantum industry and support companies in the field. Unlocking finance for quantum technologies will create a more resilient Europe.