We choose to invest in the quantum ecosystem because we believe that it has the potential to revolutionise multiple industries, from computing and cybersecurity to materials science and healthcare. We believe that the quantum industry is at an inflection point, much like classical computing in the 1950s or AI in the early 2010s. While there are technological and commercialisation hurdles, the potential upside for early investors in leading quantum startups is extraordinary. By taking a diversified approach and focusing on companies with strong IP, strategic partnerships, and with both near and mid-term applications, we hope to position ourselves at the forefront of the next technological revolution. Luckily, we are in Australia, which possesses a rich quantum talent pool and many global thought leaders. We intend to help a select few build important companies in the sector.

Quantum: A long-term vision

Quantum has been part of our DNA since we launched in 2018, with Q-CTRL as our first investment. While quantum utility timelines are uncertain, we recognised then that error suppression/correction would be crucial for full-stack quantum computers to function.

Q-CTRL exemplifies the forward-thinking mindset needed in this space, expanding across industries with top-tier science and engineering. They make quantum solutions useful by suppressing errors in quantum computers and advanced quantum sensors, bringing quantum advantage closer than ever.

This is a great example of how patient capital and a shared vision can turn deep tech ideas into useful products generating strong investment returns. 

Quantum mechanics at the core of our thesis

Quantum mechanics emerged in the early 1900s when scientists discovered that energy and particles behave counterintuitively at small scales. It underpins modern technology like semiconductors, GPS, and MRI machines. Quantum mechanics sits at the core of our investment thesis, extending beyond computing to the full spectrum of quantum technologies:

• Quantum cryptography and communications – Securing the future with encryption rooted in the laws of physics.
• Quantum sensing and timing – Enabling unparalleled precision in navigation, imaging, mining and materials science.
• Full-Stack Quantum computing – Investing in every layer, from hardware to algorithms, QML, and error correction.
• New Frontiers – New enhancers grounded in quantum mechanics, from next-gen materials to next-gen computation, quantum data centres and interconnects.

Quantum sensing & timing: Ready now

Unlike quantum computing, which is still far from broad adoption, quantum sensing and timing are already functional and deployable. Banks, airlines, data centres, and power grids depend on atomic time to stay in sync, and precision tools like atomic clocks will drive the next wave of innovation.

Quantum sensing, which collects data at the atomic level, is a proven technology with real-world applications - from improving medical devices to accurate navigation and industrial quality control. It enables measurements that were previously impossible due to precision limits or feasibility.

The current challenges are scaling, miniaturisation, manufacturing, and cost. The future belongs to those who recognise this potential and take the lead in making these technologies practical and accessible.

Quantum Cryptography & Interconnects: Securing the Future

As technology advances, so do threats. This calls for financial institutions and policymakers to prioritise the shift to quantum-safe cryptography, and we expect to see quantum security roadmap implementations shortly. Quantum cryptography is already being deployed by telcos, governments, and banks, ensuring future-proof security. 

Quantum communication enables quantum-safe networks, layering cryptographic defenses to guarantee secure, trusted connectivity. But quantum communications go beyond security. As quantum computers scale, how can different systems reliably share quantum information? One of the most promising solutions lies in quantum interconnects: high-speed, ultra-secure links that allow quantum devices to exchange information.

By leveraging entangled photons or other quantum transmission methods, quantum interconnects enable qubits to communicate across systems, forming larger, more powerful quantum networks. This is the foundation for scalable quantum computing, seamless system integration, and the next leap in global connectivity.

The promise of quantum computers

Today’s largest supercomputers can not, in millions of years, simulate a caffeine molecule, optimise a fifteen stop delivery route, or understand the exact process by which photosynthesis occurs. To design better materials for something like improved battery densities, simulate better drug design, or optimise pricing and portfolio construction, we need more advanced tools. That’s where quantum computers come in. Designed and built utilising quantum mechanical properties, logical quantum computers (“QC”) could solve all of these problems in seconds. Essentially, a useful QC could calculate today’s incalculable problems, providing disruptive solutions to many of the world’s pressing problems. 

While the promise of QC is apparent, progress to date has been limited due to noise in the machines. QCs are very fragile,  and need protection against environmental disturbances such as stray radio waves, electrical cross-talk, and machine noise that can cause errors. Any disturbance to a QC’s qubits (the computing units) can upset its quantum nature, causing it to revert to being a classical processor with no computational advantage. This Achilles' heel is subject to a great deal of research and experimentation. Until the industry gets to the point of having a full error-corrected machine, the potential of a fault-tolerant QC will be limited and not fully realized.

Today’s quantum computers

Current quantum computers (QCs) are still in their early stages, with limited capability. Most have only a small number of qubits and are just beginning to solve a few small, practical problems. Experts estimate that a fully error-corrected QC is still 5–10+ years away. Until then, QCs will gradually scale in qubit count while improving error rates, steadily increasing their computational power.

In 2025, IBM plans to release a 1,100+ qubit machine, the largest yet, by integrating multiple QCs in parallel. Other companies are pursuing similar scaling strategies. However, which qubit architecture(s) will dominate—or if multiple will coexist—remains an open question, as each comes with its advantages and challenges. IBM uses Superconducting Qubits made from superconducting circuits. They are among the most developed but require extreme cooling. Spin Qubits use the spin of electrons or nuclei to store quantum information. Highly scalable due to their small size and compatibility with semiconductor manufacturing. Trapped Ion Qubits use lasers or microwaves to control individual atoms, offering long coherence times and high gate fidelity.

New qubit types will continue to emerge, some proving more viable than others. As breakthroughs and roadblocks shape the field, novel quantum circuit architectures will evolve, defining the future of scalable quantum computing.

The use cases for today’s QCs

Today, businesses can buy a QC directly from the manufacturer and/or rent compute time on any number of QC’s from cloud providers such as IBM, Microsoft, AWS, or Google. As AI continues its rapid growth, it is becoming increasingly interconnected with other breakthrough technologies—quantum computing being one of the most transformative. Quantum’s rise is poised to propel AI to new heights, accelerating advancements in computation, optimisation, and scalability.

Quantum computers, with their ability to perform certain calculations exponentially faster than classical systems, will enhance AI’s accuracy, efficiency, and problem-solving capabilities. For example, since AI relies on identifying patterns across images, text, and data, quantum computing’s ability to process multiple possibilities simultaneously could revolutionise pattern recognition, making it faster and more precise.

At present, the primary use cases being explored include:

• Quantum Simulation: Quantum computers could simulate the behavior of complex quantum systems, which has applications in chemistry, material science, drug discovery and forecasting.
• Quantum Optimization: Quantum computers could solve optimization problems more efficiently than classical computers with applications in logistics, finance, and supply chain management.
• Quantum Machine Learning: Quantum computers could improve machine learning algorithms and enable the development of new AI models.

Demand for QCs is growing rapidly, with research institutions leading early adoption and businesses quickly becoming the primary users. Large financial institutions, pharmaceutical companies, and energy firms are emerging as major players in quantum computing.

In 2024, Saudi Aramco, an energy and natural resources company, purchased a quantum computer from neutral atom qubit company Pasqal. Meanwhile, firms like JP Morgan, HSBC, BMO, Ally Financial, Goldman Sachs, and Bank of America are leveraging QCs for pricing complex derivatives and optimising portfolios, marking a shift toward real-world commercial applications. Big pharma companies like Roche, Pfizer, and Moderna are using QCs to accelerate drug discovery, optimise molecular interactions, and reduce development timelines.

Governments are also embracing quantum, with regions investing in quantum computers to drive industrial growth and innovation. They recognise quantum’s potential to enhance regional capabilities and foster new industries.

Main Sequence’s QC investment thesis

MSV has chosen to invest carefully in a few different full-stack QC companies based on different architectures, management team maturities, and business models. 

We recognise that:

• The promise and upside of QC is enormous, especially in simulation and optimization;
• The market for quantum computation is expected to be in the billions;
• Today’s QCs are immature with many technical challenges to solve;
• It is unclear which quantum architecture(s) will ultimately win; and
• The cloud providers of quantum computation and data centers hosting quantum computers are experiencing increased demand from business users.

Because multiple qubit types and architectures are in development, and it remains uncertain which will reach commercial viability first - or if multiple will coexist - our approach is to take a diversified position, carefully making small investments across different architectures. We have seen significant progress in error suppression and error control in 2024 and expect that to continue. Simultaneously, we are seeing companies build bigger machines with more capability. Importantly, these machines, while sub-optimal, are being heavily used by customers seeking to understand how quantum will affect their businesses and how QCs alone or in combination with classical computers may solve problems faster and cheaper.

Australia’s quantum position

Australia has a National Quantum Strategy to grow the quantum industry in the country. The strategy sets out a long-term vision for how Australia will take advantage of the opportunities of quantum technologies. The strategy aims to invest in, connect and grow Australia’s quantum research and industry to compete with the world’s best, drive commercialisation through new programs to incentivise the continued growth of quantum use cases, create pipelines for investment in industry-ready quantum technologies through the National Reconstruction Fund, support new quantum infrastructure to ensure it meets the Australian industry’s needs now and into the future, cement Australia as the world’s top destination for quantum talent, strengthen Australia’s international partnerships and influence as well as opportunities for Australian quantum companies, champion responsible innovation and ensure the growth of Australia’s quantum industry supports economic prosperity while safeguarding our national interests.

Aligned with this strategy, we want to help supercharge Australia’s quantum position by leveraging its incredible talent pool and opportunities - not by reinventing the wheel, but by elevating existing advancements and driving commercial strategy. By backing the best teams in building the best quantum tools we hope to help accelerate the quantum future.

New frontiers in quantum

By exploring new frontiers, we aim to capture the groundbreaking, forward-thinking breakthroughs that will continue to emerge as the field evolves. One key challenge in any technological frontier is scalability and interconnectivity—how different technologies, both quantum and non-quantum, integrate and influence one another, from sensing to cloud management to full-stack quantum computing.

In these years of AI growth, we see an interconnected landscape that accelerates its advancements and supercharges quantum mechanics, allowing us to explore new ways of understanding these technologies. 

Today, we classify quantum technologies into distinct categories, but as the field advances, these boundaries will shift, and areas will merge and evolve in new ways. How can quantum mechanics reshape edge computing, control systems optimisation, reservoir computing, quantum batteries, or nanofabrication? These are the questions that drive innovation.