From University of Maryland lab to publicly traded company.
That’s the path for technology being developed by IonQ. The College Park-based company on Monday made official a deal to merge with special purpose acquisition company dMY Technology Group, Inc. III. When the merger closes and it begins trading on the New York Stock Exchange under the symbol IONQ, the company is poised to be the first “pure-play” quantum computing company that is publicly traded, leaders said.
The broad outline of the deal squares with talks first reported by Bloomberg last month: The combined company will be valued at $2 billion.
With the public offering, the company expects to raise $650 million. That includes $350 million through an investment vehicle known as a PIPE, or private investment in public equity. Investors in the PIPE include Fidelity Management & Research Company LLC, Breakthrough Energy Ventures — which is the sustainable energy investment arm founded by Bill Gates — Hyundai Motor Company, Kia Corporation, Silver Lake, MSD Partners, L.P. and TIME Ventures, the investment fund for Salesforce founder Marc Benioff. Existing investors in the company including New Enterprise Associates, GV and Mubadala Capital are also participating.
Along with recognizable names in tech, the investors also point to the company’s belief that the technology, which harnesses quantum mechanics for a more powerful form of calculation than the 1s and 0s of the computers we’re now using, can help to solve big, foundational problems in business, healthcare, climate change and supply chains.
In an interview with Technical.ly, IonQ CEO Peter Chapman and dMY Technology Group III CEO Niccolo de Masi pointed to a number of use cases, from faster drug discovery, AI and banking, to better optimized routes for delivery drivers and assembly line configurations for automotive companies or more capable solar cells. To deliver these kinds of advances, the company plans to work alongside others, and create full-scale applications.
"The future of quantum is entirely within our own hands."
Becoming a public company will allow IonQ to have access to capital to bring the technology that can help those industries, and can help to continue to attract talent as the company grows.
“The future of quantum is entirely within our own hands,” said Chapman, who has served for 40 years in technology roles, including leading engineering for Amazon Prime before joining IonQ.
Within three years, IonQ’s goal is to develop rack-mounted, room-temperature quantum computers, a little bigger than an Xbox, which can be networked together. Proceeds from the merger will help the company move its development roadmap forward faster, and set up the manufacturing processes necessary for those systems.
“We’re looking to build quantum computers so there are thousands of them, if not millions, so we need to make them so they can be made cheaply,” Chapman said.
To date, its advances in quantum computing — including the introduction in October of a 32-qubit system that is available on Amazon Braket and Microsoft Azure Quantum — have brought it to the forefront of the work to bring discoveries in quantum computing into practical use. But that’s a space that also includes other publicly traded companies like IBM, Alphabet and Microsoft, so market positioning alongside those companies can help it stay at the front. de Masi pointed out that transformational companies of past generations of technology like Microsoft, Amazon and Apple all went public when they were relatively young. IonQ is going public at a time when SPACs are an increasingly popular vehicle to take companies public sooner. There’s no doubt it comes with public scrutiny. But being publicly traded can also help companies to establish good practices and access capital in different forms to keep growing.
"I'm hoping that we become the capital of quantum for the nation. It goes with our being in the capital region, but also because this is foundational."
The growth also appears poised to bring increased prominence to College Park when it comes to quantum computing. It’s an area where the University of Maryland College Park has years of research acumen, helped by strategic investment and partnerships with the federal government, that led to advances in the lab. The university now has with 200 researchers working on the technology in a variety of disciplines, such as computing, sensing and imaging, and quantum communications.
University of Maryland College Park President Dr. Darryll Pines said IonQ’s move to go public is a validation that an investment in science and basic research can be a starting point for a path: Invest in science at a university, and people who can make discoveries. Then, they make discoveries that can in turn become products that power companies.
For its part, IonQ was founded in 2015 by University of Maryland professor Chris Monroe and Jungsang Kim, and draws on 25 years of research advances in labs at the University of Maryland and Duke University. In turn, the company has its base in College Park. In October, the same month that it unveiled its next-generation computer system, the university invested $5.5 million to help the company open a 23,000-square-foot Quantum Data Center in the Discovery District, which is a campus-adjacent area for startups and companies to base in College Park. Chapman said the company plans to continue growing its team; check out current open roles here.
The university will continue to be in partnership with the company, through the labs that are making advances, and students who might be able to work at the company. The growth can help to attract talent around the city, and it is building a Quantum Technology Center that will serve as a nexus for this work.
But leaders are also thinking about where this positions College Park nationally. Alongside a place as one of the top research institutions and government center, it now has a publicly traded company in a category alongside the biggest tech companies. Those are the kinds of ingredients and efforts to concentrate talent that have led to plenty of other hubs. Those places have had not just technology, but a company that made everyone take note, as well.
“I’m hoping that we become the capital of quantum for the nation,” Pines said. “It goes with our being in the capital region, but also because this is foundational.”