Special Acquisition Companies or SPACs have seen growing popularity in investment circles generally, and more recently in the quantum technology space.
SPACs are shell companies typically comprising institutional investors set up to raise money and then eventually acquire a private company. In other words, SPACs provide private companies with a pathway to going public without the private company having to navigate an IPO. In 2021, it has been reported that 613 SPAC listings raised a total of $145 billion, 91% more than the amount SPACs raised in 2020.
In the quantum computing space, 2021 saw IonQ, Inc. close with the SPAC, dMY Technology Group, Inc. III, on a merger valued at $2 billion, with IonQ receiving $636 million in gross proceeds. 2021 also saw Rigetti & Co., Inc. enter into a definitive merger agreement with another SPAC, Supernova Partners Acquisition Company II, Ltd., with expected gross proceeds of at least $261.75 million. The Rigetti-Supernova merger is anticipated to close on March 2, 2022 subject to a final vote of Supernova shareholders on February 28, 2022.
Continuing with this trend, D-Wave Systems Inc. announced on February 8, 2022 that it entered into a definitive merger transaction agreement with another SPAC, DPCM Capital.
The D-Wave and DPCM Capital merger is expected to trade on the NYSE under the symbol “QBTS” on a merger valued at approximately 1.6 billion with anticipated gross proceeds of approximately $340 million.
Alan Baratz, CEO for D-Wave, remarked that the deal is “an inflection point signaling that quantum computing has moved beyond just theory and government-funded research to deliver commercial quantum solutions for business.”1 D-Wave will use proceeds from the transaction to, among other activities, build upon the 200 plus patents amassed since its founding, demonstrating that intellectual property has been core to securing their future in the quantum computing space.
From the perspective of DPCM Capital, CEO Emil Michael has remarked that “D-Wave will have access to the full projected $150 billion quantum computing total addressable market (TAM).
With the near-term TAM expected to exceed $1 billion, and the potential for the TAM to rapidly expand as annealing quantum computing applications mature and gate-model applications emerge, we are confident that D-Wave will continue to deliver long-term value to stockholders by accelerating the commercial quantum computing market.”
For the future, what remains to be seen is whether SPACs are a short term trend for quantum technology companies wanting to go public, or whether there will be a return to the more traditional IPO path to going public. Regardless, the three SPAC based mergers for IonQ, Rigetti, and D-Wave amount to a total valuation of approximately $5 billion, demonstrating the unquestioned importance and value, of quantum technology.