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This week’s long take looks at the Finnish Quantum Tech ecosystem
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The long take
You have probably heard of Kimi Räikkönen, the famous Finnish race car driver, or Linus Torvalds, the man behind the Linux operating system. Finland has given us the Finnish sauna, the Leningrad Cowboys and the Northern lights. But, let’s be honest, most of us know next to nothing about this tiny Nordic nation tucked away between Sweden and Russia.
Finland, small yet fine
With a population of 5.5M (0.07% of the global population), a GDP of $269.654B (0.24% of the global GDP) its scale quickly becomes apparent, as it is roughly the equivalent of Wisconsin in terms of population and economic output.
However, Finland spends more than average on technology and innovation, as much as 2.7% of its GDP in 2018. Industry defining companies such as Nokia, Rovio (the company behind Angry Birds), Supercell or MySQL were born out of these efforts, rooted in a strong and diverse higher education system.
Roughly 4,000 startup companies are born in Finland each year. And according to the Finnish startup association there are around 300 - 400 "growth startups", which have grown significantly over a three-year period. In 2018, these Finnish startups raised the highest amount of funding to date, as the total figure hit EUR 479M for that year.
In other words, it’s a stunningly beautiful country, with some very prominent assets, but not very noticeable on the global stage by most metrics.
And if you are an investor, Finland might not be the best use of your time and resources if you are looking for ROI at the portfolio level.
Global quantum ambitions
But that is different within Quantum Tech. Finland has declared its goal to build the world’s most powerful quantum computer. And it has the science, companies, organization and resources to make it happen. Let’s take a closer look.
According to IQM, the QC company with Finnish roots, there are about 200 quantum experts in the Finnish capital of Helsinki alone. This ecosystem has benefited from systematic investments by academia and the government for almost 60 years.
“We are leveraging the strong momentum of the Finnish quantum ecosystem to spread our quantum computers from Europe around the whole globe. Developing quantum technologies is of high strategic importance for Europe and Finland is an integral part of the worldwide quantum industry.” says IQM CEO Dr Jan Goetz.
Early efforts in building and operating low temperature labs are at the origin of these efforts. Olli Lounasmaa, a reputed Finnish physicist, founded the Low Temperature Laboratory in 1965 at the Helsinki University of Technology in Otaniemi, Espoo, the present Aalto University. His laboratory became world famous in achieving records in low temperatures, based on their research into superfluid helium‐3 and nuclear magnetism.
With a Finnish, and European, ecosystem of government and industry projects, that, often, are more long term oriented than American or Chinese equivalents, they have been able to sustain basic research in the field throughout the decades.
The Finnish government is currently working on a national strategic quantum initiative. Finnish ministers are closely involved in the quantum ecosystem with close ties to several companies and the business interest in emerging solutions is growing. Mika Lintilä, Minister of Economic Affairs, is very interested in the possibilities of quantum technologies ” I have seen the future. Quantum computers will open a new era for industry, services as well as responding to climate change and for other domains. We have to make Finland a quantum computing centre for the EU.”.
Finnish quantum labs and universities
In fact, there is a strong network of basic research universities across Finland, with groups that cover all aspects of the quantum stack and applications such as quantum computing, sensing or communication.
The Aalto University Center for Quantum Engineering Otaniemi campus benefits from significant resources, clean rooms and low temperature labs with a focus on quantum sensing, communications, computing and simulation. Aalto University is the central hub out of which many of the Finnish quantum innovations have been incubated.
Turku Quantum Technology (TQT) is a theoretical physics research group at the University of Turku, which is also home to the Turku Center of Quantum Physics (TCQP).
The University of Oulu houses the Nano and Molecular Systems Research Unit.
And the University of Jyväskylä is home to the Quantum Many Body Research Group.
These 4 research universities with long established working groups build the academic backbone of the Finnish quantum project. A joint research group, the Helsinki institute of Physics, unifies and coordinates this.
Markku Räsänen, the Head of Public Affairs at IQM, says “it is this talent and close knit ecosystem that allows us to punch above our weight”.
Government programs and support
The Finnish government has long ago recognized the importance of this sector. And the opportunity for Finland to have a significant, global impact.
The national supercomputing center CSC has a $250M HPC program underway for building one of the three EU supercomputers in Finland. The hope is to leverage that infrastructure with future quantum computing investments.
The state research organization VTT represents the Finnish side in the European Quantum Flagship project
The Academy of Finland supports these quantum projects scientifically.
And the Quantum Technology Finland project is a national center of excellence focused entirely on Quantum Tech.
Finnish quantum companies
It is no wonder that with this dedicated academic and governmental support for over half a century, Finland is home to a number of world famous quantum companies and an ecosystem that spans the entire technology stack.
The leader of this quantum wolfpack is, arguably, IQM. With EUR11.5M in funding to data, IQM employs roughly 35 people, 90% of which are PhD’s in quantum and related fields. A small business oriented team is emerging as well and backed by a strong HR pipeline that will see the IQM team grow through 2020.
Markku and the team are clear regarding their mission “we want to be the leading QC company in the world”. Asked how he thinks they can achieve this he points out that the talent at IQM is truly world class and highly focused on a very clear mission. IQM has strong specialties in readout, speed and fidelity technologies but their focus is on the full hardware stack and a fully integrated set of partners.
Bluefors is another world famous competitor, critical in the quantum supply chain, out of Helsinki and with close to 200 employees and over 500 systems delivered the global leader in cryogen-free dilution refrigerators - a wonder of technology that keeps Quantum Computers cooler than outer space.
Quantastica is a well known quantum software company, with its origins in Serbia but incorporated in Finland and backed by Finnish investors.
Aivon designs sensors, electronics and mechanics for quantum systems. Asqella develops submillimeter-wave cameras. Canatu designs new materials. Okmetic makes high performance silicon wafers.
The local landscape of companies engaged in Quantum Tech is completed by firms such as Elekta Neuromag, Murata Electronics Oy, Rockley, BeneQ and Picosun.
Finnish Quantum Investors
Finnish capital has fueled a lot of this activity, complemented by American and German investors, and ensured that many of the Finnish ventures mentioned above do not have to worry all too much about the 2020 Quantum Winter.
Maki VC is an early-stage venture capital firm partnering with deep tech from Helsinki with $80M in funds and investments in IQM.
OpenOcean, also out of Helsinki, can deploy a total of $145M and has also participated in the Finnish quantum project.
Tesi, the Finnish government VC fund has EUR 1.3B under management and is dedicated to push Finland to the next level of growth and has invested into IQM and Picosun.
Icebreaker.vc manages in total €70 million with their latest fund being €50M closed in April 2020 has invested in Quantastica.
Additionally, the Finnish government has an innovation funding agency called Business Finland that typically co-invest with these private investors in the form of research and internationalization grants.
Conclusion
Finland has a tremendously strong ecosystem of scientists, academics, entrepreneurs and investors, all supported by strategic government projects, to design, build and commercialize a full quantum tech stack across hard- and software.
Finland also takes a leading role in several EU Flagship projects, is a partner of choice for many German, French and British industrial companies, and is actively working on forward looking, commercially viable projects that go beyond your typical quantum use cases.
Possible examples are application-specific quantum processors using a combination of digital and analogue blocks to reach quantum advantage with less qubits than typical NISQ applications. For these ideas the IQM team based in Helsinki gets support from the IQM Germany team based in Munich. A perfect example for hardware-software co-design.
And while a lot of work remains to be done, more software ventures required to build code and service companies in the sector are still, largely, absent, when it comes to Quantum Tech, Finland is clearly punching above its weight and a serious contender for the world title.
Onnea suomeen!
For executives interested in Quantum there are multiple European Quantum Tech ecosystems that are able to cover the full stack across hardware, software and use cases that should be on your list as potential partners. And Finland belongs at the top of that list.
For investors interested in Quantum in Quantum Tech you have to think not so damn classically, and go off the beaten path. Finland is a great example where seed investing can make a real impact, or where risk oriented investors could potentially write large checks. Find these golden nuggets and understand the ecosystem.
We thank the following for their contribution to this article: Jan Goetz, Markku Räsänen, Ingela Waismaa, Tom Henriksson, Petar Korponaić, Mika Lintilä Minister of Economic Affairs.
Addition May 7, 2020
Additional research lab: University of Jyväskylä, Hybrid Quantum Technologies in Silicon group
The theory group and a superconducting structures group at Jyväskylä are all under the umbrella of the Nanoscience Center.
Correction: HIP is only a coordinating organization between a few groups (mostly related to particle physics).
On a separate note, I also would like to alert you to the IBM Quantum Challenge, which will start on May 4th at 9 am EDT.
With this challenge, IBM not only intents to celebrate the 4 year anniversary of their Quantum Hardware being available to users. But also offer an opportunity to engage the entire quantum community in a fun way.
The 4 challenges - create your own quantum circuit, build a calibration matrix, decrypt a secret message and define your own quantum algorithm - get increasingly complicated but are accessible to anyone (looking at you, my CEO and investor peeps).
And it all happens on their real quantum computers, which is really pretty cool. Besides bragging rights you will also get a digital badge and donations will be made to the Python Software Foundation.
For Quantum Investors
This week we added:
7 new quantum firms to our tracker
4 new quantum institutes
4 new quantum VC fund
6 new quantum deals in our fundraising pipeline
Details available here in our weekly investor digest.
The SciFi corner
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