D-Wave, a Global Leader in Quantum Computing Systems, Software, & Services Announces Plans to Bring Commercial Quantum Computing to Public Markets Via Transaction with DPCM Capital, Inc.
Transaction expected to accelerate D-Wave’s ability to expand quantum computing beyond theory and government-funded research to innovative commercial quantum solutions for enterprises
Transaction to result in up to $340 million USD in gross proceeds, including a $40 million USD PIPE, with participation from PSP Investments, Goldman Sachs Asset Management, NEC Corporation, Yorkville Advisors, and Aegis Group Partners. Pro-forma implied market capitalization of the combined company is up to $1.6 billion USD
Strengthens D-Wave’s impact as a center of Canadian quantum computing innovation and technology
BURNABY, B.C., PALO ALTO, Calf., MIAMI (Feb. 8, 2022) -D-Wave, a quantum computing startup based in Canada, revealed its intention to go public today. The company will merge with financial corporation DPCM to achieve an estimated valuation of $1.6 billion.
D-Wave Systems Inc., a leader in quantum computing systems, software, and services—and the only provider building both annealing and gate-model quantum computers (“D-Wave” or the “Company”)—announced today that it has entered into a definitive transaction agreement with DPCM Capital, Inc. (NYSE: XPOA), a publicly-traded special purpose acquisition company (“DPCM Capital”). As described below and subject to certain limitations, an innovative feature of the transaction provides DPCM Capital’s non-redeeming public stockholders the opportunity to receive a pro-rata portion of a bonus pool of 5 million shares at transaction close.
The transaction is expected to enhance D-Wave’s leadership in commercial quantum computing and accelerate quantum use cases into significant customer segments, including manufacturing, logistics, pharmaceuticals, finance, and government. Upon closing of the transaction, shares of D-Wave Quantum Inc., a newly formed parent company of D-Wave and DPCM Capital, are expected to trade on the NYSE under the symbol “QBTS.”
Quantum computing’s computational value underpins the promise of even greater societal and business impact, ranging from the development of new products and the identification of new business lines to previously unimagined solutions in weather modeling, global supply chain distribution, financial market optimization, drug discovery, and new materials.
“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,” said Alan Baratz, CEO, D-Wave. “D-Wave, along with DPCM Capital and our new and long-term investors PSP Investments, Goldman Sachs Asset Management (Goldman Sachs), NEC Corporation, Yorkville Advisors, and Aegis Group Partners, collectively believe that this isn’t a moment of hope or science. Instead, we believe this event represents a moment of practical value creation for customers and for investors. We are working with our customers to identify applications with a high likelihood of quantum value and to translate those problems to run on the quantum computer and then validate that value. We expect this ‘value creation and validation’ to accelerate as an increasing number of diverse use cases emerge—creating a robust cycle of product delivery, application development, and market growth.”
D-Wave plans to utilize the funds to speed up the delivery of in-production quantum applications for blue-chip customers and to expand on the more than 200 U.S. patents it has been given since its establishment in 1999. The deal also marks a turning point in Canada’s market-leading creation of a strong quantum ecosystem. D-British Wave’s Columbia-based Quantum Center for Excellence will continue to lead the way in groundbreaking research and development.
The next generation of annealing quantum computers, as well as the advancement of D-gate-model Wave’s program and the enhancement of D-LeapTM Wave’s quantum cloud service, hybrid solvers, and software development tools, will be the emphasis of D-R&D. Wave’s D-Wave anticipates expanding its global reach beyond the United States, Canada, Europe, Japan, Singapore, and Australia to other emerging quantum computing markets.
“While quantum computing is complex, its value and benefits are quite simple: finding solutions to problems that couldn’t be previously solved, or solving problems faster with more optimal results,” said Emil Michael, CEO, DPCM Capital, Inc. “D-Wave is at the forefront of developing this market, already delivering the significant benefits of quantum computing to major companies across the globe. As the only quantum computing company in the world that is building both annealing and gate-model quantum computers, D-Wave will have access to the full projected $150 billion quantum computing total addressable market (TAM). With the near-term TAM expected to exceed $1 billion, and the potential for the TAM to rapidly expand as annealing quantum computing applications mature and gate-model applications emerge, we are confident that D-Wave will continue to deliver long-term value to stockholders by accelerating the commercial quantum computing market.”
Enhancing D-Wave’s Leadership in Commercial Quantum Computing
D-Wave is the only quantum computing business showing the commercial value of quantum computing to a blue-chip client base, and we believe it is at the vanguard of providing the benefits of quantum to a variety of customer categories. D-Wave is also the only quantum computing company with real-world experience running a large-scale quantum computing business. Volkswagen, Toyota’s R&D Labs, Accenture, BBVA, NEC Corporation, Save-On-Foods, DENSO, and Lockheed Martin are among D-commercial Wave’s customers, which include 25 of Forbes’ Global 2000 firms. Thousands of developers around the world have produced hundreds of early quantum applications in fields such as resource scheduling, mobility, logistics, drug discovery, portfolio optimization, and manufacturing processes, in addition to the enterprise customers that are already employing D-Wave.
D-Wave’s Key Advantages:
- D-Wave is the only company in the world building both annealing and gate-model quantum computers. This is important because different types of quantum systems benefit different types of quantum applications: D-Wave’s annealing systems are designed to unlock complex optimization problems; gate-model and annealing systems can both solve linear algebraic and factoring problems, like those in machine learning and cryptography; and D-Wave’s gate-model program is expected to produce systems that are most suited for differential equations, like those in quantum chemistry.
- D-Wave is the first, and only, provider to offer real-time, full-stack quantum systems: from superconducting quantum processing unit (QPU) chip fabrication that powers the quantum systems, to hardware engineering, post-processing software, quantum hybrid solvers, and open-source developer tools. This approach, coupled with real-time quantum cloud delivery of these products, yields a regular, rapid product-to-market benefit for customers.
- D-Wave is also the only company today with a quantum computer that supports business applications at production scale. Delivered as Quantum Computing as a Service (QCaaS) in D-Wave’s Leap quantum-cloud service and available in 38 countries, D-Wave provides both broad access and professional services-enabled quantum hybrid application development.
All of this contributes to the acceleration of the use of, and demand for, quantum computing.
Transaction Overview:
The transaction values D-Wave at an equity value of approximately $1.2 billion USD. The transaction also includes an innovative incentive structure, whereby a bonus pool of 5 million shares will be allocated pro rata to non-redeeming public stockholders of DPCM Capital, effectively reducing their cost basis. A similar bonus pool of up to 1.8 million shares has been established for Private Investment in Public Equity (“PIPE”) investors to ensure the same effective cost basis for PIPE investors as for public stockholders of DPCM Capital.
The combined company will receive $300 million USD in gross proceeds from DPCM Capital’s trust account—assuming no redemptions by DPCM Capital’s public stockholders—as well as $40 million USD in gross proceeds from a group of strategic and institutional investors participating in the transaction via a committed PIPE. The PIPE is led by new and existing investors including leading Canadian public-sector pension-plan manager PSP Investments, NEC Corporation, Goldman Sachs, Yorkville Advisors, and Aegis Group Partners.
Following closing, the combined company will continue to operate from D-Wave’s R&D and head office location in British Columbia, Canada.
Source: D-Wave