More mature markets such as the United States have a big technology and chip sector which lends itself readily into morphing into Quantum Computing, The ability to design and manufacture semiconductor chips can be employed in the quest for building arrays of Qubits (quantum bits). But what about the United Kingdom? How can one invest in the UK’s growing Quantum Computing sector?
The United Kingdom doesn’t have any chip makers. OK it technically has chip designers ARM (which emerged from Acorn Risk Machines), but it has little chip fabrication facilities. Certainly there are no AMD’s Intel’s or NVIDIA’s in the United Kingdom. Whilst there are private companies and start-ups in the UK such as Oxford Quantum Circuits, Cambridge Quantum Computing, ORCA Computing and a whole host of others (see 5 promising UK Quantum Companies to watch). Investing the US or even China is somewhat easier with the ability to buy directly into US technology companies that are researching and developing Quantum technologies. Even China has two publicly listed companies, Alibaba and Baidu working on Quantum Computing and applications.
This begs the question of how to invest in the UK’s burgeoning Quantum sector without being a fund manager? One smart way is to invest in those funds or companies which invest in the UK Quantum Computing sector. One of these companies is IP Group, which emerged as a technology transfer company to assist universities to spin out technology and Intellectual property. It is the company that provided funding to Oxford Nano Pore which has a very smart way to read DNA using membrane pores – a company which has received hundreds of millions in investment and could radically change the economies of DNA sequencing.
It should come as no surprise that a company such as IP Group is firmly looking at the Quantum space. In fact it has made a placement into Quantum Motion Technologies. Which is creating a scalable, high-density quantum computer on a silicon chip for the cloud. The Oxford based company recently raised $10 million in funding, with IP group one of the largest investors.
Unless you are an angel investor with deep pockets, there are few investment opportunities in deep tech (biotech and quantum) and therefore a rational investment thesis is to buy shares in the publicly listed company IP Group which is listed on the London Stock Exchange.
Recently IP group have announced a fund specially aimed at Quantum and the following areas below. The Quantum accelerator fund has a total permitted spend of 12 million pounds.
- Connectivity: techniques for securing data in storage and in flight.
- Situational Awareness: Autonomous systems. Sensors and detectors for the built environment, transport and infrastructure.
- Imaging and sensing: “seeing things currently invisible”.
- Computing: Transformational computers for solving currently intractable problems.
The past performance of IP group we think has been hit by factors such as Brexit uncertainty and the general undervaluation of the UK as innovation centre. Therefore for the record, we declare owning stock in IP group for a number of years and have met the director: Alan Aubrey. We also know a few of the portfolio companies that IP Group have invested into and have faith in the vision of the board. Of course this is our personal opinion and not investment advice.
This article is not financial advice and should not be considered as such. Always take professional financial advice before acting on any new information.