Highlights:

  • It works across building post-quantum cryptography software which is an approach to data encryption to combat quantum computers.
  • It also sells quantum simulation software for development of new drugs and materials and quantum sensors for medical technologies.

A USD 500 million round of funding for the quantum computing software company Sandbox AQ, which was spun off from Alphabet Inc. last year, has concluded, as per the company’s recent announcement.

participated in the round together with TIME Ventures, Breyer Capital, T. Rowe Price funds, and its chairman Eric Schmidt, the former CEO of Google LLC.

Marc Benioff’s (founder of Salesforce Inc.) TIME Ventures, former chief executive of Google, Eric Schmidt (now Chairman of TIME Ventures), Breyer Capital, and T. Rowe Price funds participated in the round.

Sandbox AQ, incorporated as SB Technology Inc., is headed by Jack Hidary, the CEO, who previously oversaw research on quantum computing at Alphabet’s X lab. Its primary objective is to create software for post-quantum cryptography, a novel method of data encryption that can withstand assaults from quantum computers.

Quantum computers, which use quantum mechanics, are thought to be capable of performing calculations millions of times faster than today’s most powerful supercomputers. Although that day is still likely to be years away, such machines have the potential to render today’s encryption methods obsolete.

The fear is that hackers are already gathering data in preparation for the day when quantum computers become available. The National Institute of Standards and Technology of the United States Commerce Department established new cryptography standards last year that could better withstand quantum computer attacks.

Sandbox AQ’s software scans an enterprise’s information technology systems for data that still uses older cryptography standards. It identifies which parts of the system need to be updated immediately and seeks to strengthen the company’s overall encryption, Hidary told a news agency in an interview.

Furthermore, Sandbox AQ sells quantum simulation software to aid in the development of new drugs and materials, as well as quantum sensors for medical devices and technologies that could one day replace the Global Positioning System.

Sandbox AQ claims to be targeting customers in industries such as telecommunications, finance, healthcare, government, and cybersecurity. Previously disclosed customers include Mount Sinai Health System in New York, SoftBank Group Corp.’s telecommunications business, and Vodafone Business.

Holger Mueller of Constellation Research Inc., said, “While there have been suggestions that some quantum hardware startups might be struggling, Sandbox AQ goes and lands USD 500 million in funding. That’s because it’s focused on quantum software solutions, providing encryption that’s safe in case quantum computers ever manage to break the encryption we have now. On the other hand, Sandbox AQ is also ahead of the curve with its quantum simulation offerings, so it’s no surprise investors are willing to put big money into a company that hedges is bets on both sides of the wave.”

Schmidt said in a recent statement that the company already has more than 15 enterprise and government customers and is collaborating with more than 30 universities to train Ph.D.s and other talent needed to build its post-quantum cryptography solutions.