The Series C round was led by PSG Equity, with participation from Intel Capital, Red Dot Capital Partners, and existing investors, and amounts to one of the largest funding rounds in the quantum startup industry. The company’s valuation was not publicly disclosed.

The company said that more than half of the companies working on quantum computing worldwide now rely on Quantum Machines’ technology to build and scale their systems. 

“We work with hundreds of customers, many of them being the leaders in the field, including large corporations, large national labs, university labs, and startups all over the world,” Itamar Sivan, co-founder and CEO of Quantum Machines, told Fortune. “This growth allowed us to raise this very significant round of funding that will itself allow us to develop our next-generation technology.”

Quantum computing is one of the most exciting fields within the tech sector because it has immense potential across various industries, including drug discovery, weather forecasting, financial risk analysis, and logistics optimization.

These computers harness the principles of quantum mechanics, such as superposition and entanglement, to perform complex calculations exponentially faster than classical computers. Companies like Quantum Machines provide the critical infrastructure needed to control, operate, and scale quantum computers, rather than attempting to build a full quantum computer.

“The quantum computing industry is reaching an inflection point,” said Rotem Shacham, Director at PSG Equity. “We believe that QM has established itself as the ‘go-to’ solution that leading quantum companies rely on to build and scale quantum computers. As the quantum computing market continues to grow at an accelerated pace this decade, QM’s leading market position and ability to work with multiple quantum technologies uniquely position them to expand their leadership.”

A thriving industry

Quantum startups typically raise smaller funding rounds compared to traditional tech startups due to the industry’s somewhat niche market, high R&D costs, investor risk aversion, and longer timelines.

However, this has been changing as tech companies make major strides in the field. Earlier this month, QuEra Computing, a neutral-atom quantum firm, announced a funding round of over $230 million, with investment from Google’s Quantum AI business unit and SoftBank Vision Fund, among others.

In May 2023, U.S.-based PsiQuantum, which aims to build a large-scale quantum computer, raised $450 million in a funding round led by BlackRock-managed accounts.

“We’re seeing a really great acceleration in the field,” Sivan told Fortune. “When we work in a field that has advanced technology, people can get doubtful. Is it going to progress? Is it really going to mature? Is it really going to fulfill the potential? But we’ve seen unbelievable progress in the field.”

Big Tech companies, including Google, Microsoft, and IBM, have all announced quantum computing breakthroughs in the last few months.

Late last year, Google announced its Willow chip, while IBM announced it had successfully developed a quantum processor chip that consists of more than 1000 qubits. Last week, Microsoft revealed the Majorana 1, a chip the company claimed would accelerate the timeline for quantum computers capable of solving meaningful, industrial-scale problems from decades to just years.

“Quantum computing is already a thriving industry, in a rapidly growing industry, ” Sivan said. “I believe we will see further acceleration of the field in the next couple of years, once we will see some more…commercial use cases of quantum computers emerging.”

“Then we’ll just see further and further acceleration until the full-blown computers will start…running the most promising algorithms.”

“Our role in this industry is to push progress forward,” he said. “With this significant funding, we’ll be able to do that even further.”

Investment plans

Company execs said the funding will allow Quantum Machines to expand its technology and support the scaling of quantum computers to tens of thousands of qubits, with much of the funding allocated to R&D.

Sivan also said the company was planning to expand its sales and marketing teams and scale up hiring in more countries. Quantum Machines currently employs around 200 people, he said. The company has major offices in Israel, Denmark, and Germany and plans to open two more this year. With employees in over 10 countries, they aim to further expand their teams globally.

“Significant adoption of quantum computers is around the corner. Quantum is one of the biggest, most important technological races of our generation. It’s a no-lose game, and we are deeply honored to work with leaders in this field, delivering the core infrastructure to make this possible,” Sivan said.