London-based quantum technology encryption startup, Arqit, recently announced its plans to go public. It has merged with a special purpose acquisition company, Centricus Acquisition Corp. With this development, the combined valuation of the business will be approx $1.4B. Virgin Orbit, Sumitomo Corporation, and Centricus sponsor Heritage Group form part of the Private Investment in Public Equity fund.
According to the press release, “The transaction values the combined company at a pro forma enterprise value of approximately $1.0B and is expected to provide up to $400M of gross proceeds to Arqit from a combination of $345M of cash held in Centricus’ trust account (assuming minimal redemption from Centricus existing shareholders), and approximately $70M from a fully committed PIPE. All existing shareholders and investors will continue to hold their equity ownership, and current Arqit shareholders will remain the majority owners of the combined company at closing.
The proposed transaction is expected to be completed by the end of the third quarter of 2021. “Upon closing of the transaction, a newly formed Cayman holding company, Arqit Quantum Inc., will merge with Centricus, acquire Arqit and register its shares for listing on the Nasdaq Stock Market,” says the company.
Aim of this development
This will help the company to support the launch and construction of two satellites in 2023 in order to protect against growing hacking threats. Those satellites will use a transformational new quantum protocol invented by Arqit to solve known problems of satellite quantum key distribution. The company claims it will create a backbone of secure keys within data centres all over the world, and a quantum safe boundary protecting those data centres.
In the statement, the company also announced that BT has signed a contract to become Arqit’s exclusive reseller in the UK, incorporating their products into its portfolio of Security solutions. BT was a foundational research partner for Arqit in 2017, and the companies aim to develop the UK’s quantum communications infrastructure together. Virgin, which invested via its Virgin Orbit subsidiary, has also signed contracts to launch the first two Arqit satellites, possibly from Cornwall in the UK, targeted for 2023.
David Williams, CEO & Chairman of Arqit says, “After four years of innovation in stealth mode by world-leading multi-disciplinary teams of scientists and engineers, we are ready to go to market. This technology is important and we need to take it to hyperscale as quickly as possible, because the problems we solve are problems for everyone. The capital from this transaction will enable us to develop critical relationships with existing and new customers and fully scale our platform as a service with a balance sheet which gives us speed, momentum and the resilience to deliver on our commitments to customers for the long term.”
New cybersecurity platform
Arqit has also announced the launch of a new quantum cybersecurity platform – QuantumCloud, to solve current and future threats to the security of internet communications.
According to the company, the platform uses transformational innovation in both quantum physics and crypto-mathematics, and has been developed over the course of four years of collaboration with the UK Government, BT (a British telecommunications company), and Virgin Orbit.
To create 2000 jobs in the UK
According to the company, the launch of QuantumCloud positions the British economy at the forefront of global innovation in quantum, space, and cyber technology. With QuantumCloud, Arqit alone intends to create 2,000 high-tech jobs in the UK.
Since 2017, Arqit has received significant financial support from the UK Government through various departments and innovation programs. The company will remain operationally headquartered in the UK.
Arqit’s current customers include the UK Government, the European Space Agency, BT plc, and Sumitomo Corporation. In addition, many companies like Verizon, BP, Northrop Grumman, and Iridium are currently testing the use of Arqit’s technologies in different use cases.
Everything about QuantumCloud technology
QuantumCloud allows organisations to simplify and strengthen their encryption on a global basis, appliance-free. According to the company’s website, it is moving away from a complex PKI infrastructure, and the need to trust third parties. Instead, it is moving to an encryption platform designed for the cloud and a world of connected devices.
Over the past four years, Arqit claims to have invented and patented technology which provides the benefits of Quantum Key Distribution (QKD) to end point devices. It puts a lightweight agent at any end point device, which is able to create an unlimited number of symmetric keys with partner devices.
QuantumCloud’s reach is due to be expanded further through the usage of pioneering satellite technology. Currently, the symmetric keys used in data encryption are created terrestrially. However, by 2023 Arqit plans to launch two quantum satellites, which will build on established QKD protocols to extend the capability to both create and transmit secure keys to the data centres of Arqit’s customers globally.
Arqit’s mission
Founded in 2017, Arqit claims to have invented a quantum encryption technology which makes the communications links of any networked device secure against current and future forms of hacking – even an attack from a quantum computer.
Arqit was founded by UK satellite industry veteran David Williams. Its venture investors included Notion Capital, Seraphim Space, Evolution Equity, and the UK government’s Future Fund.
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