On this episode, Yuval Boger speaks with Rob Jesudason, CEO and founding father of Serendipity Capital, a $1.3 billion everlasting capital automobile investing in quantum computing, communications, and sensing corporations together with Quantinuum, Monarch Quantum, Delta g, and QuantX. They talk about how buyers — each institutional and retail — can consider quantum corporations throughout modalities, with Rob arguing that triangulation throughout consultants is crucial since, as he places it, modalities are like faith the place everybody believes they’re proper. Rob shares his view that the quantum trade is transitioning from lab science to managerial execution and engineering scale, that governments ought to associate with the non-public sector slightly than being the primary examine, and that some nations ought to intention to be the quickest integrators of profitable applied sciences slightly than the innovators themselves.
Key Takeaways
Evaluating quantum corporations requires triangulating throughout many consultants as a result of modalities operate like faith, with every believer satisfied theirs is the proper path.
The quantum trade is shifting from lab-driven science to managerial execution and engineering scale, that means groups now want as a lot operational expertise as physics expertise.
Governments ought to keep away from being the primary investor in quantum corporations and as a substitute associate with non-public capital later, stepping in as validators slightly than preliminary funders.
International locations with out the size to construct a number one quantum {hardware} stack, like Australia, Canada, or Singapore, are higher off changing into the quickest integrators of profitable applied sciences slightly than attempting to be the innovators.
Transcript
Yuval Boger: Whats up, Rob. Thanks for becoming a member of me immediately.
Rob Jesudason: Hello, good to satisfy you, Yuval, and thanks for the chance. So who’re you and what do you do? My identify’s Rob Jesudason. I’m the CEO and founding father of Serendipity Capital, and we spend money on early-stage corporations that improve and safe crucial applied sciences and infrastructure. And quantum is totally one of many applied sciences that we actually concentrate on.
Yuval: However not the one one, it appears like, proper?
Rob: Not the one one. I imply, it’s applied sciences like AI, cybersecurity, semiconductors, house satellite tv for pc, and quantum. And I feel when we’ve these conversations, we frequently speak about applied sciences in silos as in the event that they’re standalone issues, however the magic truly occurs once you mix the applied sciences, proper? So it’s safety on semiconductor chips. It’s house communication, quantum-secure communication. So we concentrate on the place these applied sciences intersect to guard Western nations — the US and its allies — each governments and corporates.
Yuval: How massive is the fund? And I do know you’ve got just a few quantum investments, so what’s in your portfolio?
Rob: So the very first thing I’d say is we’re not a fund, we’re a everlasting capital automobile. And what does that imply? Meaning we’re an organization, and so when folks spend money on us or give us cash, they change into shareholders in an organization versus unit holders in a fund. And meaning we’re not pushed to deploy capital in a sure window or exit investments throughout a sure window.
The scale of the enterprise is $1.3 billion US {dollars}. And we’ve been investing in quantum since inception, which was 2019. However my background in quantum — I’m a enterprise particular person, not a physicist, and I’ve listened to your podcast each week diligently, and you’ve got very eminent physicists, so I wouldn’t declare to be a type of.
However I used to be on the administration board of a really massive financial institution, and we made an funding with the federal authorities in 2013 in quantum, and that triggered my curiosity in quantum. And once we arrange the agency in 2019, quantum was a key focus, and we’ve been investing constantly since then.
Yuval: Are you able to inform us about a few of your investments in quantum?
Rob: Yeah. So we make investments throughout modalities in quantum computing, quantum communications, and quantum sensing. I’ll speak about just a few of these. In all probability the funding that individuals know essentially the most is Quantinuum. We went on the cap desk in 2020. I used to be on the board, and we principally invested in each spherical from 2020 by means of to the IPO, and immediately we stay the sixth largest shareholder in them. And as you realize, they’re a vertically built-in, full-stack quantum computing firm on their fourth system.
We’re invested in Monarch Quantum, which is photonic laser mild engines out of California. Photonic lasers is a multimodality functionality or a part of a quantum computing system. It’s usually 35 to 50 p.c of the invoice of supplies of a quantum laptop. Within the UK, we spend money on Delta g, which is a quantum sensing firm. Their sensors can sense and determine objects 35 kilometers beneath the floor. We spend money on QuantX, which is an Australian quantum atomic clock firm that has despatched its atomic clocks into house with SpaceX.
So we’ve invested in corporations which might be wanting beneath the floor. We’ve invested in quantum methods which might be vertically built-in, promoting into governments and corporates, and we’ve invested in quantum atomic clocks which might be being despatched into house. So we’re a broad church.
Yuval: I feel it’s very tempting to speak concerning the public markets. At QuEra, the query I get each day is, “Are you doing a SPAC anytime quickly?” and so forth. I’m not going to reply that — I simply ask the questions, proper? However how do you consider corporations which might be available in the market proper now, within the public market? First, as a everlasting capital automobile, does your constitution can help you purchase shares in a public firm in quantum? And do you suppose there are too many, too few, too early, too late?
Rob: I feel it’s an excellent matter to speak about. Our mandate permits us to spend money on non-public corporations that go public and maintain that fairness, and it additionally permits us to spend money on public corporations. So there’s the philosophical problem of ought to corporations stay non-public for longer? Ought to they change into public? And I feel you may make the case for both.
However let’s discuss particularly concerning the quantum sector. I feel the truth is, in the event you’re deeply embedded within the quantum ecosystem and also you’ve been round for some time, rightly or wrongly, there’s been a little bit little bit of damaging choice within the individuals who’ve gone to SPAC, proper? Anybody who’s an investor or an operator, as you might be, Yuval, is aware of when persons are doing non-public rounds, is aware of who can efficiently increase capital, and is aware of who has gone and accomplished SPACs.
I feel the place Quantinuum was completely different — and I’m not saying this as a result of it’s a portfolio firm — but it surely was an IPO. And it was an IPO the place they needed to discuss to long-only buyers and strategics and get the help to do a proper IPO course of and listing. And I feel going ahead, there can be a lot of nice quantum corporations that can do IPOs. I’m not significantly crucial of SPACs. I feel it’s a route, however I’m undecided…
You realize, I feel there are some superb non-public corporations who aren’t public as a result of they will increase cash within the non-public markets. I feel Quantinuum was barely completely different as a result of their largest shareholder was a strategic who occurred to be additionally breaking apart as a public firm — Honeywell, proper? So it was a barely completely different state of affairs the place they may have remained non-public. That they had a really massive strategic shareholder, and so they have been refined sufficient, had the observe report, had the strategic help and the long-only help to do a proper IPO course of.
I feel the remainder of the sector that has come by means of SPACs — there’s some credible corporations, but it surely’s way more of a blended bag. I feel the way forward for the quantum trade just isn’t much more SPACs, however extra nice corporations going by means of the IPO course of, getting a correct institutional capital base and strategic capital base versus a retail capital base, proper?
I don’t suppose it’s significantly good for quantum to commerce like crypto. The long run for quantum is for it to commerce with much less volatility, with long-term public help for these shares. And so I feel we’re in a transition interval.
Yuval: I imply, you talked about that you just’re not a physicist. I solely have a graduate diploma in physics, so from a number of my colleagues’ perspective, I don’t perceive something about physics both. However we are able to have that debate another time. So how does a retail investor who simply reads, “Oh, quantum will clear up all of the world’s issues in the future” — how do they select which public quantum firm to spend money on? Or possibly that explains the volatility that you just’re describing.
Rob: Yeah. I’ll make two factors. One is, how does the retail investor come to that call level? And I feel it’s very arduous, proper? As a result of there’s a lot narrative, and there are some companies the place narrative is honest, however physics is physics. And narrative solely goes thus far.
I feel sure corporations within the quantum trade have barely accomplished themselves a disservice by creating a niche between the PowerPoint shows that individuals will learn and the white papers that a number of non-technical folks don’t learn. And so there’s a number of momentum buying and selling, and that results in the volatility.
I’d develop the purpose to a broader one: in a world the place increasingly non-public sector cash is coming in, the place lots of the folks, together with us, aren’t physics PhDs, how do even they consider corporations? And the way we method it’s we constructed an ecosystem. We solely ever bought shares to senior executives who had run massive infrastructure corporations, nationwide safety operatives, and scientists. Considered one of our most up-to-date investments was we took a stake in Emergence Quantum, which is an R&D lab with 25 physics PhDs. And we even have our ecosystem of portfolio founders who’re physics PhDs, and we triangulate.
I feel what it’s important to do, whether or not you’re public or non-public, is it’s a world trade. You’re going to have to have a look at corporations the world over, throughout the stack, and triangulate. And the reason being I all the time examine modalities to faith. Everybody believes there’s a God, however they consider they’re proper. So simply since you’ve received one senior advisor who’s a impartial atom knowledgeable or a founder you’ve backed who’s a trapped ion knowledgeable, very not often are they going to say, “Look, to be trustworthy with you, I reckon these two different modalities may be higher.”
So truly, you’re going to must triangulate. And our view is the longer term is multimodality, and we predict there are two or three modalities which might be actually fascinating, together with impartial atom. We expect that’s completely one of many winners within the endgame. And I feel QuEra is likely one of the winners within the sport. We consider in trapped ion, and we predict superconducting and spin qubits — throughout the seven modalities, we’ve taken a home view that some are extra promising than others.
However inside that, I feel triangulation is actually essential. And sadly, it’s arduous sufficient as a non-public investor in an institutional enterprise. I feel it’s virtually not possible for a retail investor immediately. However I’m inquisitive about your view. You’ve clearly considered this problem your self.
Yuval: Properly, a few issues. First, I’ve interviewed many CEOs from many various modalities, and never everybody, however a lot of them are convincing, saying, “Oh yeah, my spin qubits are going to rule the world due to this,” or no matter it’s that they declare. And I keep in mind asking considered one of them, “Properly, if that is so nice, why isn’t everybody doing it?”
Rob: Yeah.
Yuval: Precisely. And he principally stated — he had an excellent reply, I feel. He stated, “Look, I’ve been doing this for 20 years. I’ve forgotten issues that others haven’t even discovered but. It will simply take 20 years to catch as much as the place we’re.” I generally give the analogy: you would be a improbable oboe participant, however that doesn’t imply you’ll be able to play the violin tomorrow. Sure, you perceive music, however the method is totally completely different.
The one query that I prefer to ask is to say, “Okay, I perceive you consider in your modality. Let’s assume you might be satisfied that it’s not going to work. You’re hitting a wall. You found one thing that simply doesn’t be just right for you. What’s the following greatest modality that you’d select?” And I feel that’s an fascinating query. That’s a telling one for the place not less than the insiders really feel about one thing that’s not simply theirs.
Rob: Yeah. And I feel that’s why I take a view that — and also you’ve had different company who’ve talked concerning the attributes of various modalities and the rationale why completely different modalities are helpful for various use instances, and I’m not going to rehash that — however I agree with that, and I feel the longer term for the winners is to be multimodality, not less than for a sure interval.
This comes additionally again to the colleges, proper? As you realize higher than me, I’m sitting in Boston immediately. The Lukin Lab has produced a couple of impartial atom firm. Oxford Physics Division has created a couple of trapped ion firm. So it begins there, as you rightly say. They’re individuals who have spent 20 years of their life on a single modality, and so they come by means of these colleges, and due to this fact they find yourself there. And there’s nothing incorrect with that, and so they all have their attributes.
In a world of seven modalities, our view is there are two or three which might be going to be the pivotal ones within the subsequent three to 5 years. And I feel the winners are going to be corporations that reap the benefits of that.
The opposite factor I might say to your listeners is I feel the trade is in a essentially completely different place immediately than six or seven years in the past once we began investing in quantum at Serendipity. It’s concerning the science, it’s about modalities, however we’re getting into the part of managerial execution and engineering scale, proper? The problem for the businesses is: you’ve got proved as an organization you’re one of many leaders in your modality. Now it’s important to construct a scale establishment that may ship one system, then a number of methods. And that’s a really completely different problem. That’s not being within the lab, that’s not getting some financing. That’s tens of 1000’s of engineering hours. That’s constructing engineering processes, and that’s a unique problem. That’s the problem the winners are at immediately — constructing scale enterprise — and it’s going to play out within the subsequent three to 4 years. And for us, it’s by no means been extra thrilling.
Yuval: After we spoke about your portfolio, you talked about a number of corporations and so they’re all {hardware} corporations, or not less than primarily {hardware} corporations. The place are your software program investments?
Rob: Properly, look, I might say we make investments throughout the stack. We now have talked about some {hardware} corporations. Monarch, I might put within the management methods, the center layer. However we’ve invested in BlueQubit — I’m positive you realize the blokes — they’re out of Harvard, Shankar’s enterprise. We’ve been extra centered on the {hardware} and the management methods for the time being as a result of actually for software program to progress, you want the methods to be increased high quality. You want the error correcting to be increased high quality.
I feel we’re shifting into the period the place software program — actually, it’s algorithms — turns into extra fascinating. We actually just like the BlueQubit guys. I’ll identify an organization we’re not a shareholder in: I feel Phasecraft is a extremely fascinating firm. They’re on the market. However I feel the magic, the motion — no matter phrase you need to say — is on the {hardware} facet, the methods facet, the management system facet. Typically folks over-focus on the {hardware} facet. I feel there are going to be management methods gamers which might be going to be multimodality, and so they’re going to be oligopolists or monopolists in that space. And from an investor perspective, that’s actually fascinating.
However the algorithm corporations will come. And what’s your private view? Do you’re feeling that the time is now for algorithm corporations? We’re being comparatively sluggish. We’re being very selective. Perhaps we’re being too sluggish. What’s your view?
Yuval: My view is that the {hardware} is getting there. At QuEra, the corporate I work for, we introduced a cope with AWS to place a fault-tolerant quantum laptop on the cloud in 2028. And I say, “Okay, nicely, who’s going to make use of it? What are they going to do? What algorithms?” So assuming the {hardware} works — and it really works, but it surely may work higher and bigger, so there’s nonetheless completely work to do — there’s going to be a degree the place the software program issues.
A few of the software program, particularly the software program that’s near the {hardware}, could also be one thing that the {hardware} corporations simply need to maintain themselves — like Intel and the microcode, or NVIDIA and CUDA, proper? For that goal or one thing like that.
Rob: Yeah.
Yuval: However I utterly agree. So let’s—
Rob: Sorry, I need to say, if I kick myself on one funding we must always have accomplished that we didn’t do, it was Classiq, and I do know you used to work for Classiq, proper? We checked out it in 2020 or ’21, and we checked out it once more in ’22, and we must always have accomplished it. And we didn’t as a result of we have been like, “Is it too early?” However they’ve accomplished rather well.
Yuval: Properly, for a everlasting capital firm, appears like your horizon must be a little bit bit longer. However sure, they’re a wonderful firm. I loved working there. I loved serving to them with a portion of their journey, and I hope they’ll succeed — as a shareholder as nicely.
Let me ask you a unique query, although. Let’s assume that tomorrow you determined it’s time to enter public service, and the federal government calls you and says, “We’re making these big investments in quantum, and we’ve received this funds, and we wish you to assist us allocate it throughout varied corporations.” Do you divide it equally into 17 slices and provides the identical quantity to every firm? What’s your technique? Do you decide winners? Can the federal government try this? What would you advocate?
Rob: Yeah, that’s a wonderful query and a massively topical query given sovereignty points round know-how. We’ve thought loads about this and we discuss to a number of governments all over the world, and I’d make three or 4 factors.
One is, all governments aren’t the identical. So let’s speak about a bunch of nations that would legitimately try to construct the definitive world-leading system in a modality or create a pacesetter in a part of the stack — e.g., ASML in semiconductors. I feel for that group of nations, you do form of have to select winners. I’m not about spraying it throughout the ecosystem. There’s a certain quantity of ecosystem issues it’s important to do, however the actuality is the winners have to scale, they want capital, and in the event you don’t have capital, it’s possible you’ll lose them.
I’m from the UK, and Cambridge Quantum and Oxford Ionics are good examples of fine corporations that ended up being a part of massive US corporations immediately. And so the problem is, are governments certified to select the winners, as you rightly say? And due to this fact, I feel it’s important to associate with the non-public sector. You shouldn’t intention to be the primary examine. You ought to be the final examine. As a result of too typically these governments are the primary examine, and so they’re selecting the incorrect corporations, and so they’re propping up corporations that the non-public sector actually doesn’t need to fund. I feel there are specific examples in continental Europe the place that might be the case. I’m not going to call them, however there are examples of that.
I feel what the US has accomplished very nicely is — you’ve seen within the final three months the federal government investing in some corporations — however truly most of those corporations, the leaders within the US throughout modalities, have primarily been non-public sector funded. There have been DARPA grants and different issues on the sting, however what has pushed their scale has been non-public sector financing, and really the governments are available in in direction of the latter levels. And you may see that even with a few of the debates on AI.
I feel there’s one other set of nations the place they’re smaller nations, they’ve capital, they’ve intent, the place it’s not significantly real looking to construct a number one system in a modality. And this may be a controversial matter, however my private view can be, you realize, Australia, possibly Singapore, possibly Canada would possibly fall into that group of nations. However what you’ll be able to then do is: are you able to be one of many first nations to get the newest system into your nation from the leaders? Are you able to then construct an ecosystem round it? Can your corporates in that nation associate with that firm to construct use instances sooner than anybody else?
So I might say there’s a set of nations who probably are the innovators, and there’s a set of nations that ought to realistically intention to not be the innovators, however the quickest integrators of the profitable applied sciences into their economies. And I feel that’s the place governments ought to lean in.
Yuval: That’s an fascinating perspective. And by the way in which, that’s possibly the place software program is available in. If you happen to don’t suppose that your nation will be the main superconducting vendor, then possibly you would be the main software program vendor for quantum computer systems or for a selected kind of software.
Rob: Yeah, so in the event you take a rustic like Australia, which has two of the largest mining corporations, or Canada — between them, they’ve disproportionate world share of mining — then it’s best to create the software program for that trade and dominate that trade. However you may be leveraging US {hardware} to do it. That’s precisely what I imply.
Yuval: You’ve been in quantum a number of years now. What’s new? What have you ever discovered up to now 12 months that made you say, “I want I knew that earlier than”?
Rob: I’d say there are some things. Whether or not it’s over 12 months or over three years, there’s a recency to it. I feel it’s this level that we’re shifting — we’re out of the lab now. We’re into an engineering world, and that has completely different necessities for administration groups. It’s by no means been extra essential in quantum to have the steadiness between the engineering expertise and the enterprise expertise, and …
Yuval: Sadly, we skilled a recording downside and the previous few minutes of my dialog with Rob weren’t captured. He did select Oppenheimer as his dinner visitor, one cause being that he thought the physics and the federal government coverage are coming collectively after a few years, similar to in Oppenheimer’s time. I thanked Rob for a really fascinating dialog and hope to have him once more in a future episode.
Yuval Boger is the Chief Business Officer of QuEra Computing.
August 17, 2026
