The Microsoft of Quantum
Classiq just raised $110 million in a major funding round for Quantum software.
Classiq has really put Israel on the map in Quantum software, do remember back in the day Microsoft was a major backer of Classiq and is among its most likely M&A destinations.
Classiq has built a software platform to facilitate programming for quantum computers
Classiq has raised $110 million in Series C funding, reportedly the largest ever for a quantum software company, bringing its total funding to $173 million.
Classiq has a very diverse group of investors at it has matured as one of the key Quantum startups in Israel. The financing round was led by global venture capital fund Entrée Capital, with participation from Norwest, NightDragon, Hamilton Lane, Clal, Neva SGR, Phoenix, Team8, IN Venture, Wing, HSBC, Samsung Next and QBeat.
In the words of CEO and co-founder Nir Minerbi, Classiq is building “the Microsoft of quantum computing” – the software stack that powers real-world quantum applications. Calling yourself the Microsoft of Quantum really does sound good on paper, even if real Quantum computers don’t exist yet with millions of qubits to be truly useful.
That’s not to say that their partnerships aren’t growing however; Citi, BMW Group, and Deloitte are just a few organizations that depend on them, and Classiq is deeply embedded across hundreds of global academic institutions.
🚀 Quantum Coding Just Leveled Up
Classiq was founded in December, 2019 (2020 on many websites) so they are developing well for being just five years old. The company plans to scale its commercial and R&D operations globally, positioning itself as a foundational player in the quantum ecosystem with customers with increasing partnerships.
Founded by CEO Nir Minerbi, CTO Yehuda Naveh and his son CPO Amir Naveh, Classiq has developed a software operating platform that works across all major types of quantum hardware. The platform is tailored to help data scientists, computational scientists, and engineers work on quantum algorithms and build programs and applications with high-performance computational power that hold the promise of speeding up solutions to today’s most complex real-world problems.
The startup also had 2022 backing from the likes of the current Intel CEO Lip-Bu Tan, Hewlett Packard Pathfinder, the venture capital program of Hewlett Packard Enterprise (HPE); Phoenix, a $60-billion insurance company; Spike Ventures, a Stanford alumni investor group; and Samsung NEXT, the investment arm of Samsung are new investors in the company. So there aren’t just Microsoft connections here there are many others as well.
Classiq’s backers have a lot of interesting things to say about the startup.
Classiq has a very Diversified List of Backers
If you curious to look up the backers on LinkedIn this may help: Entrée Capital, Norwest, NightDragon, Hamilton Lane, Clal, NEVA SGR, Phoenix, Team8, IN Venture, Wing Venture Capital, HSBC, A&E Investments, Samsung Next, OurCrowd, Qbeat Ventures, and others.
Israeli entrepreneurs of course are skilled at sales and Nir is positioning Classiq as a great Quantum acquisition target in the years ahead, or to go public.
“We are building the Microsoft of quantum computing – a software layer that powers the next generation of quantum applications, just as Microsoft did for classical computing,” said Classiq’s Minerbi.
Classiq is really well known to Quantum developers and thus have quite an active community. The company says its platform provides advantages such as accelerated onboarding, enabling developers and data scientists get to grips with quantum computing much faster than they otherwise would.
Classiq in a Nutshell
The platform simplifies the creation and design of complex quantum circuits and is geared to allow businesses and organizations without in-house quantum experts to build quantum applications that can resolve complex calculations in areas such as the automotive industry, automation, finance, and drug discovery in the pharmaceutical industry.
Automotive industry
Automation
Finance
Drug Discovery
Pharma
Curiously a lot of Classiq’s best partners are in the Automotive industry at present. Classiq is also smaller and leaner than I had imagined. Classiq, which employs 65 people, plans to double its workforce over the coming year.
Global Expansion
Minerbi said that the newly raised funds will be used to advance the startup’s global expansion across Europe, Asia, and North America, as it seeks to become the “standard development platform for quantum applications across industry, government, and academia.”
This investment brings Classiq’s total funding to $173 million, enabling the company to scale its go-to-market, customer success, and R&D teams to meet growing demand.
Quantum Cloud Company
The reason Classiq is so likely to get acquired by an existing Cloud company is the crucial role it plays. Classiq’s platform addresses a critical challenge in quantum computing: the hardware-software gap. By enabling developers to design scalable quantum programs, Classiq supports a wide range of hardware providers, from cloud platforms like AWS and Azure to direct connections with leading quantum computers. This versatility allows developers to advance quantum applications without being locked into specific architectures.
This Quantum hybrid modular software to hardware positioning is rather unique in the world and is truly a credit to what they have built.
Achievements and Growth
Classiq has tripled its revenue and customer base annually.
Product market fit in the Automotive industry including high-profile clients include BMW, Citi, Deloitte, Mizuho, and Toshiba.
Integration: The platform is also integrated with services from Microsoft, Nvidia, AWS, and top academic institutions.
Utility: Classiq focuses on simplifying quantum algorithm design, making quantum software development more accessible and scalable.
Future positioning: As hardware improves, demand for usable quantum software stacks like Classiq’s is expected to skyrocket.
Rise of Quantum developers: Classiq’s successful funding round signals investor confidence in quantum’s near-term impact and the growing need for robust software solutions.
Classiq’s place in the Quantum world is thus given a significant boost by this funding and makes them a great Quantum startup to consider an IPO or acquisition offers. $100 million goes a long way to give them some runway. With the AI boom, in recent months Quantum has the likes of Google, Microsoft, IBM, Amazon and others have been showing off their recent Quantum chip and hardware projects. Classiq is now the among Quantum startups a significant player in quantum software and a first mover in the space.
It’s not clear to me why they have done so well in the Automotive space, though these are stable customers - Classiq serves enterprises across industries, including BMW, Citi, Deloitte, Rolls-Royce, Mizuho and Toshiba.
Hardware Agnostic Compatibility
Classiq also works well with its Quantum peers. It boasts further integrations with quantum hardware and services from companies such as IBM Corp., IonQ Inc., Rigetti Computing Inc. and Alice & Bob SAS. M&A acquisition targets are Microsoft, Nvidia and IBM, among others like Quantinuum. I could not find what their supposed market cap valuation is with the funding, though I would guess in the 2$-$3 Billion area.
Funding from Israeli Government
They also have Government support. Classiq was selected last year to be part of the country’s first quantum computing center (IQCC), funded by the Israel Innovation Authority. The center was established in June to help Israel compete in the global race to develop practical quantum computing capabilities. Since Quantum has national defense implications its funding budget globally might increase in the years ahead of geopolitical uncertainty continues.
World-Class Team and Intellectual Property
What’s also been clear for me is Classiq’s main strength is their team of PhDs. Now after five years they also have experience, IP, patents and a valuable platform that can be scaled according to how the industry develops, which is still nascent.
The company is powered by a team of skilled researchers and engineers, including quantum computing pioneers and enterprise software veterans. Together, they bring hundreds of years of combined experience from top technology institutions and leading global companies. The expertise spans quantum physics, software engineering, chip design and compilation technologies – all contributing to Classiq’s enterprise-grade innovation.
Therefore Classiq’s positioning is truly above and beyond valuable.
Israel is a Bright Star in the Quantum Industry
We have to note here how developed Israel is in Quantum computing is crazy for their relative size and population. Per capita it’s easily the most valuable nucleur for innovation in the space.
Israel is home to 22 quantum computing startups, according to Startup Nation Central data. Quantum computing startups this year raised about $289 million in fresh capital, including Classiq’s financing round and the $170 million in funding secured by Quantum Machines. In 2024, investments in quantum computing startups in Israel reached $82 million, up from about $42 million a year earlier.
Israel is highly likely to deliver the world a power-house in Quantum computing’s future. QCR has some unique observations too on the Series C.
The Classiq platform uses proprietary algorithmic technology for quantum circuit compilation, enabling rapid synthesis of quantum circuits with millions of gates. This allows complex quantum programs to scale efficiently and run on any quantum computer — a task virtually impossible to accomplish manually.
Entrée Capital managing partner Avi Eyal said: “Quantum computing is advancing at a rapid pace, and Classiq has emerged as the clear leader in the quantum software category.
Classiq is a super interesting bet on the value of the Quantum software layer. I’m not sure if it’s too early but it’s a very diversified bet that will continue to evolve as the industry begins to scale and as the technology catches up with the enormous promise as an emerging technology.
While many Quantum hardware startups won’t see the light at the end of the tunnel in the long wait to scalable Quantum computers, Classiq just might and won’t have any lack of M&A targets when the time comes. I can only hope it goes public sooner rather than later since the quality of Quantum startups that are public is currently very low.
The PR around the Series C is for the most part grounded and pragmatic. How actual revenue is growing also seems like a strong point: Minerbi said Classiq’s sales have been tripling annually, and the company expects to cross into double-digit millions in revenue in the coming year. “We are creating growth engines that will allow us to explode when the market arrives,” he said. Their integration with Microsoft Azure Quantum is notable.
By abstracting hardware-specific details, Classiq simplifies the development process for users without deep expertise in quantum mechanics. That’s not a function likely to become obsolete but expand in real-world utility in the coming years.
Is Quantum going to Boom in the last 2020s?
There are some indications that Quantum computing is going to go a bit more mainstream, at least as far as hype goes in the public narrative. For example as I’m sure you are aware of - Alphabet's Google, Microsoft, Cisco and Amazon have all announced quantum computing chips in recent months, and Nvidia plans to open its own quantum computing lab. Startups such as PsiQuantum are also raising hundreds of millions of dollars to build systems.
These BigTech announcements have made some Quantum stocks go up like meme stocks. If Classiq can IPO while Quantum is a hyped technology on the stock market it improves its chances of surviving the Quantum winter. Why they have found traction in the Automotive sector and not Finance or Biotech is however a bit concerning. However with a low head count and good revenue growth, it’s clear management has been prudent.
Classiq’s Series A funding was led by Venture capital firm Wing Capital co-led the round with cybersecurity research lab and startup foundry Team8 Capital. Their $4 million seed round was led by Entrée Capital. With Intel’s new CEO having a not insignificant stake in Classiq really makes things more interesting for analysts like me.
The Challenge is Real in the 2020s of Quantum Software
I consider Classiq’s CEO above average. Nir might be considered one day a pioneer in Quantum software. This is because frankly the quantum computing stack is still in its infancy, which makes quantum algorithm development an almost impossible task. Today, there are only a handful of algorithms in existence. Quantum computing hardware is advancing quickly, but there are still major challenges with the acceleration of software due to the absence of abstraction, the most fundamental element in software development.
The key for Classiq will be building developer tools at the University level.
“Bringing the best quantum software stack to academic users is the ultimate way of accelerating the quantum computing revolution. We’re delighted to collaborate with Microsoft on this important endeavor,” said Nir Minerbi, Co-Founder and CEO at Classiq.
This positions Classiq like a Quantum education hub for future Quantum developers of stacks that have yet to even truly be invented and fleshed out while the hardware innovation is just getting going.
The truth is Quantum technology is at an awkward purgatory of a middle ground between promise and fruition.
“This new funding comes at a pivotal time. The quantum industry is now moving from consulting services to quantum products and from prototyping to production. With this funding, we will expand upon our work to become the platform on which forward-thinking organizations develop game-changing quantum software that makes the impossible possible.”
Quantum computing is no longer just a concept of the future but an emerging field attracting major investments. Classiq’s achievements and collaborations with tech giants highlight a market ripe with possibilities. However we need to bare careful in our assessment of the viability of the future of existing Quantum startups, most will not survive or be sustainable. Only the best managed companies with the right timing and real-world utility will even have a realistic chance.
Due to Classiq’s positioning in the nascent Quantum software stack, it has a better chance than most. Namely to scale independent or simply to be acquired, what they are building will likely contribute to innovation in the space in a lasting way. Classiq's platform is already used by leading universities in quantum computing courses and research. As Generative AI changes the junior developer community will some of those talented folk inquire about a career as a Quantum software developer? Time will tell.
Quantum startups are the very definition of high-tech on the frontier and Israel knows champions here. While Classiq is trying to build another Microsoft, it has more often in earlier years been compared to the electronic design automation (EDA) houses serving the traditional semiconductor industry, like Synopsys and Cadence Design Systems.