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A team member at D-Wave Systems, based in Burnaby, B.C.,, works on the dilution refrigerator system that cools the processors in the companys quantum computer. (D-Wave Systems Photo / Larry Goldstein)

Burnaby, B.C.-based D-Wave Systems, the quantum computing company that counts Jeff Bezos among its investors and NASA among its customers, has struck a deal to go public with a $1.2 billion valuation.

The deal involves a combination with DPMC Capital, a publicly traded special-purpose acquisition company, or SPAC. Its expected to bring in $300 million in gross proceeds from DPMCs trust account, plus $40 million in gross proceeds from investors participating in a PIPE arrangement. (PIPE stands for private investment in public equity.)

Quantum computing takes advantage of phenomena at the quantum level, processing qubits that can represent multiple values simultaneously as opposed to the one-or-zero paradigm of classical computing. The approach is theoretically capable of solving some types of problems much faster than classical computers.

Founded in 1999, D-Wave has focused on a type of technology called quantum annealing, which uses quantum computing principles and hardware to tackle tasks relating to network optimization and probabilistic sampling.

Physicists have debated whether D-Waves Advantage system should be considered an honest-to-goodness quantum computer, but the company says that question has been settled by research that, among other things, turned up signatures of quantum entanglement. D-Wave is included among the quantum resources offered by Amazon and Microsoft, and it also has its own cloud-based platform, known as Leap.

The SPAC deal has already been cleared by the boards of directors for D-Wave and DPCM Capital. If the transaction proceeds as expected, with approval by DPCMs stockholders, it should close by midyear. The result would be a combined company called D-Wave Quantum Inc. that would remain headquartered in Burnaby a suburb of Vancouver, B.C. and trade on the New York Stock Exchange under the QBTS stock symbol.

Today marks an inflection point signaling that quantum computing has moved beyond just theory and government-funded research to deliver commercial quantum solutions for business, D-Wave CEO Alan Baratz said in a news release.

Among the investors involved in the PIPE transaction are PSP Investments, NEC Corp., Goldman Sachs, Yorkville Advisors and Aegis Group Partners. Other longtime D-Wave investors include Bezos Expeditions as well as In-Q-Tel, a venture capital fund backed by the CIA and other intelligence agencies.

In what was described as an innovative move, the SPAC deal sets aside a bonus pool of 5 million shares for DPCMs non-redeeming public stockholders.

D-Wave says it will use the fresh funding to accelerate its delivery of in-production quantum applications for its customers, and to build on a foundation of more than 200 U.S. patents. The company is aiming to widen its offerings beyond quantum annealing by developing more versatile gate-model quantum computers.

Emil Michael, DPMC Capitals CEO, said the total addressable market for quantum computing services could amount to more than $1 billion in the near term, and rise to $150 billion as applications mature.

While quantum computing is complex, its value and benefits are quite simple: finding solutions to problems that couldnt be previously solved, or solving problems faster with more optimal results, Michael said. D-Wave is at the forefront of developing this market, already delivering the significant benefits of quantum computing to major companies across the globe.

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Quantum computing venture backed by Jeff Bezos will leap into public trading with $1.2B valuation - GeekWire