UK cybersecurity startup PQShield raises $37M for post-quantum cryptography

Leading post-quantum cryptography (PQC) startup PQShield today announced a Series B raise of $37mn. This comes as organisations and businesses hasten to get “quantum-ready,” ahead of the first PQC standards being released in a few weeks time. 

While today’s NISQ era quantum computers are not a danger to traditional means of encryption, future machines have been identified by among others the NSA as a threat to cybersecurity. 

Once they become powerful enough, quantum computers could break most cryptographic schemes. Hence the need for post-quantum cryptography. 

PQC aims to develop new cryptographic systems that will remain secure even from cyber attacks performed by a quantum computer. 

‘Where security matters’

Those who are already keen on upgrading to PQC capabilities are those industries “where security matters,” Dr Ali El Kaafarani, PQShield’s founder and CEO, told TNW. “Where you have sensitive data, sensitive communication, and sensitive devices.” 

Equally, El Kaafarani said, it is those who have products with a long life spans, ones currently being designed and that will stay in the market for 15 or 25 years. For instance, the semiconductor industry. 

“They embed our hardware design IP in the chip, so that the chip is equipped to do post-quantum cryptography,” El Kaafarani said, adding that those who sit high up in the supply chain have already started the process.  

PQShield provides both hardware and software solutions (along with some at times “necessary close work” with customers to help them understand the problem). 

On the list of companies PQShield is working with are the likes of AMD, Microchip Technologies, Lockheed Martin, Collins Aerospace, Lattice Semiconductor, and Sumitomo Electric, just to name a few. 

One reason for the uptick in demand for PQC is that the US National Institute of Standards & Technology (NIST) is about to ratify its post-quantum cryptography standards next month. “All other standardisation bodies were still waiting for this in order to publish guidelines and say to their specific sectors: ‘Now we can start adopting post-quantum cryptography’,” El Kaafarani said. 

What’s more, the US government is mandating that all of its contractors for national security systems adhere to these standards by 2030, further mobilising commercial incentive.

The elite of post-quantum cryptographers

Finding talent in cryptography is hard. Finding talent in PQC is even harder. And yet, PQShield has managed to attract 45 of the emerging field’s top names — the largest number in the industry gathered in one place.

“Even if you look at the wider cryptography community, it’s not a huge community. We basically know each other by name,” El Kaafarani said. “But the very first batch of cryptographers we hired were really some of the top talents in the world and they then end up attracting others — once you create the right environment for talents, they will just attract each other.”

Risk mitigation from future threats to data

The funding round was led by VC firm Addition, with participation from new investors Chevron Technology Ventures, Legal & General, and Braavos Capital, together with existing backers, Oxford Science Enterprises.

Like for many deep tech companies, getting investors onboard with something labelled “post-quantum” has not been the most straightforward process. Identifying the right investors, and communicating why there is a need to protect, despite the absence of what needs protecting against, has been key in PQShield’s funding journey. 

“We’re not solving a problem that does not exist yet, we’re mitigating a risk. Our problem is not the quantum computer itself. Our problem is the risk that comes with a quantum computer,” El Kaafarani said. 

Founded in 2018, the company currently employs 70 people across 10 countries. PQShield will use the money to fuel innovation, but also to strengthen its commercial team.

“Perfect security does not exist. We wish it did, but it doesn’t,” El Kafaraani says. “And therefore we have to keep innovating and coming up with solutions to all problems that we’re facing in the cybersecurity field.” 

“We care about our own data — I care about my data, my personal data, my family’s data, my kids’ data,” El Kaafarani added, highlighting PQShield’s mission to make the world a more secure place. This is something we should all take better care of, now as well as in the post-quantum era.