European venture capital companies, such as 55North and Quantonation, have recently launched funds dedicated to quantum computing. However, currently, only 5% of private capital is allocated to European quantum computing companies, compared to 50% in the US, European Commission data shows.
In the second quarter, Brussels is expected to release the first draft for a Quantum Act, a document that should pave the way for Europe to become the leader in quantum technology. To stand a real chance against the US and China, the bloc must move beyond ambition and act now: reduce regulatory barriers, unlock far more private capital, and speed up commercialization, an investor says.
Recent new funds launched by VCs show that European investors are looking to capitalize on quantum computing. Just last month, Paris-based Quantonation launched its €220 million oversubscribed quantum computing fund, while last year, Danish fund 55North announced a record €300 million fund dedicated to quantum startups.
Meanwhile, Finnish company IQM, which only six months ago became a unicorn, has recently announced plans to go public via a special purpose acquisition company merger in the US. This would make it one of the first publicly listed European quantum computing companies.
While investors are showing interest in the promising quantum field, European Commission data shows that currently, only 5% of private capital is allocated to European quantum computing companies. In contrast, in the US, this share amounts to 50%.
Low private funding, fragmentation, and other issues should be addressed by the Quantum Act, which is intended to help make Europe a leader in quantum technologies.
According to Daiva Rakauskaitė, manager at VC fund management company Aneli Capital, the Quantum Act is a necessary step, but Europe will need more than ambition to stay competitive.
“Europe already lags behind many US companies and universities, which are already advanced in the quantum field. If Europe does not want to lose the quantum race to the US and China, as it does in AI, it must first give startups the freedom to move fast and avoid burdening them with regulation on a market that is still taking shape. Any regulation now would only slow the growth of the quantum sector,” Rakauskaitė says.
A report from McKinsey estimated that the three core pillars of QT – quantum computing, quantum communication, and quantum sensing – could together generate up to $97 billion in revenue worldwide by 2035. Quantum computing is expected to transform many industries, from discovering new materials to transforming finance and redefining cybersecurity.
But while it promises major breakthroughs, it also poses a serious long-term risk to today’s IT infrastructure, as future quantum systems could undermine existing encryption methods. According to Rakauskaitė, this means Europe must act now – both to develop post-quantum security solutions and to identify the most promising commercial applications of the technology.
“While it is impossible to predict when scientists will make the next major quantum breakthrough, Europe’s biggest mistake would be to wait passively for it. Companies working in sectors like pharmacy, finance, and logistics should already be running pilots and testing practical use cases to understand where quantum can create value,” Rakauskaitė says.
She notes that Europe already has many of the foundations needed to build a leading quantum ecosystem, including top universities, strong technical talent, public support programs, and a solid industrial base. Now, it is time to convert these strengths into companies that can move from lab to product.
According to Rakauskaitė, faster commercialization will require significantly more private capital. One way to achieve this would be to voluntarily channel more capital from long-term institutional investors, such as pension and endowment funds, into venture capital, which still represents only a small fraction of Europe’s roughly €3 trillion in pension assets.
At the same time, she notes that public funding will continue to play a critical role, and public support will eventually lead to new startups that will become attractive to private investors later on.
