Breega Watch #5 — Your Monthly Insider’s Guide to Tech Verticals. Why is this sector grabbing our attention ? Why now? What investment opportunities do we see arising ? This month, we’re exploring quantum computing. Let’s dive in.
Crafted with 💚 & 🧠 by Maximilien Bacot & Shim Jounghyun
Why Now? Why it matters?
Last month, French deeptech trailblazer Alice & Bob, that Breega proudly backs since 2020, publicly announced a massive $100M funding round, one of the largest for quantum raise in Europe. Their mission: unlocking useful quantum computing by 2030. (if you missed the news, read about it here). This isn’t just any other funding announcement; it’s a clear sign that quantum is shifting from theoretical research to commercial reality and the timing couldn’t be more critical.
Traditional computing is reaching its limits. Moore’s Law, which has long dictated the steady improvement of classical processors, is slowing down. The world is demanding new computational power to solve complex problems in areas like materials science, logistics, and cryptography. Quantum computing, with its ability to process information in ways classical systems never could, is stepping up to the challenge.
At the same time, the money is flowing in. Governments and tech giants see quantum as a strategic priority, pouring billions into research and development. Quantum computing is not just about tech — it’s a strategic asset in a global race for leadership.
And with fundamental scientific breakthroughs, increased funding, and early commercialisation efforts all converging, quantum computing isn’t a question of ‘if’ — it’s ‘when.’
TLDR: 3 things you should know about quantum computing
1. Quantum Hardware Remains the Linchpin of the Industry:
At the heart of the quantum revolution is hardware. Commercialisation and mainstream adoption heavily depend on advancements in qubit stability, coherence, and scalability. Right now, making qubits reliable enough for real-world use is the biggest challenge standing between us and the next era of computing. Alice & Bob’s cat qubits and other novel approaches are showing promise in significantly reducing qubit error rates and making useful quantum computing a reality by 2030!
2. Hybrid Quantum-Classical Systems Will Dominate the Near Term
Full-scale quantum advantage is still a decade away, but hybrid solutions integrating classical and quantum computing are emerging as a viable business model.
3. Investment Momentum is High, but Commercial Viability is Uncertain
While quantum investment remains high, the momentum is lower than its 2021–2022 peak, as AI breakthroughs have diverted both capital and attention. Investors are increasingly evaluating the near-term monetisation potential of quantum relative to AI.
Quantum’s Market Surge: The $2 Trillion Bet
With tech giants like IBM, Microsoft, Google, and Amazon joining eager startups, like Rigetti and IonQ, in investing in this exciting new technology, the market is projected to reach between $45 billion and $131 billion by 2040. But the real incentive? The estimated $2 trillion in economic value that quantum computing could unlock by 2030!
This is not only the Big Tech, governments are also doubling down. Hyperion Research predicts that public sector spending will account for 50–60% of the total market by 2027, as countries invest in quantum as a national priority.
(Sources: IBM, Hyperion Research)
Where is Quantum headed Next?
With increasing funding in the field as well as staggering progress in quantum hardware, emerging use cases in industries like finance, pharmaceuticals, logistics, and many others are arising.
But where is quantum technology headed next? The road to mainstream adoption will unfold in three distinct phases:
📍 Short-Term (2025–2028): Hybrid quantum-classical computing starts gaining traction as companies testing early use cases.
🕛 Mid-Term (2028–2035): The first fault-tolerant quantum computing milestones are achieved, opening the door to commercial applications at scale.
🌁 Long-Term (2035+): Quantum computers surpass classical systems in key tasks, demonstrating economic advantage then leading to mass adoption.
- It is very important to identify these use cases early on, as well as to clarify the challenges involved in managing expectations.
But It’s Not All Smooth Sailing
While the potential is massive, so are the challenges. Managing expectations will be crucial as the industry navigates technical roadblocks like high error rates, software compatibility issues, uncertain commercialisation paths and a severe shortage of quantum talent as existing researchers in academia are reluctant to move into the commercial side.
Competitive Landscape
Incumbents vs. New Entrants
Incumbents are prioritising cloud-based quantum computing integration and hybrid workflows, while new entrants are driving innovation in hardware scalability, error correction, and domain-specific quantum applications. However, some incumbents continue to invest in foundational quantum hardware and fault-tolerant architectures, blurring the distinction.
Is AI a competitor to the Quantum Revolution?
AI definitely is grabbing all the headlines now, but quantum is playing the long game.While AI is already generating massive commercial returns, quantum computing is still in its transition from research to reality. The two definitely are no competitors.
Quantum will supercharge AI:Quantum computing is not a substitute for AI but an enhancement. Quantum can exponentially speed up AI model training, improve cryptographic security, and enable complex problem-solving in material science and finance that classical AI struggles with.
Time Horizon Difference: AI is in its commercial boom, while quantum computing remains in its research-to-commercial transition phase. AI attracts short-term capital, but quantum remains a strategic long-term bet.
The real question isn’t whether AI will overshadow quantum — it’s how soon quantum will start making AI even more powerful.
Where the Big Wins (and Risks) Lie
Emerging White Spaces: The Next Big Opportunities
While quantum is still in its early innings, a few areas are emerging as the most promising frontiers.
- Quantum networking and cryptography are gaining traction, offering next-gen security solutions.
- Software layers that bridge the gap between classical and quantum computing are another key focus, making hybrid computing models more practical.
- And then there are industry-specific applications — finance, materials science, pharmaceuticals — where quantum could unlock breakthroughs that were previously impossible.
🗣 “ “An investment banker told us that he wished he’d had a quantum computer during the financial crisis of 2008–2009 to run many different scenarios of the bank’s balance sheet. Instead, he said, ‘we has no visibility whatsoever’. Source: BCG Analysis
The Risks: Big Players, Slow Adoption, and Tough Tech Challenges
- Competitive: Large incumbents are outspending startups, making it tough for smaller players to keep up.
- Market: Adoption curves will be longer-than-expected, resulting in commercialisation challenges
- Execution: scaling quantum hardware beyond lab environments and to commercial viability comes with significant technical & hardware constrains
Risk for us? As quantum computing becomes more accessible, there will be an increase in cyber security risks leading us to have more complex and funny-looking passwords… (Thank god for password managers…)
Where Do We See the Biggest Quantum Opportunities for Investment?
Hardware-Heavy Startups with a Clear Commercial Vision
The quantum computing market is still quite young, and the race to develop scalable, reliable quantum machines is heating up. The hardware bottleneck continues to define the sector, making industrialisation and miniaturisation key milestones for commercial viability. Companies that can demonstrate clear progress in scaling qubits, improving coherence times, and reducing error rates will have a competitive edge. While the exact commercialisation path may not be clear, a strong vision is essential for guiding development, building strategic partnerships, and adapting to market opportunities as they arise.
Startups Building Hybrid Quantum-Classical Solutions
Quantum computing isn’t replacing classical systems overnight, so companies developing hybrid quantum-classical solutions are addressing key technical challenges while enabling real-world applications. These solutions are crucial for industries like logistics and finance, where quantum computing can complement classical approaches rather than replace them. Startups that effectively communicate how their hybrid models integrate with existing AI and classical computing infrastructure will have a stronger appeal near-term returns while balancing long-term deep-tech investments.
Strong network in academia for talent and collaboration
Startups with strong ties to top universities and research institutions gain access to top talent, cutting-edge research, and opportunities for collaborations. Given the barrier around access to talent, a founding team’s strong network in academia is essential not only to successfully build the product but to scale in the future. Additionally, partnerships with research labs focusing on industrialisation of quantum computing will be key to bridging the gap between theoretical advancements and commercial applications.
In short, quantum is no longer a theory, it’s a race. The real question is, who will be leading the charge when it does.
Reach out to maximilien.bacot@breega.com if you’re building a quantum startup.
Key Open Questions
- What are the realistic commercial timelines for quantum advantage?
- How will quantum computing integrate with existing enterprise IT and AI driven systems?
- Which early use cases will generate real economic value?
