Quantonation Ventures, a venture capital firm specialising in quantum and physics-based startups, has closed its second fund at €220 million (approximately $260 million). The oversubscribed fund is more than double the size of its inaugural vehicle, indicating sustained and growing investor interest in the quantum technology sector despite the field's long-term horizons.
The firm, founded in 2018 with dual headquarters in Paris and New York City, targets early-stage investments. According to partner Will Zeng, the quantum technology ecosystem has matured since the first fund, leading to "a shift in the types of investment opportunities that are available." This includes growing demand from academic and industrial labs and opportunities in supporting "picks and shovels" companies.
Evolving Investment Thesis
Quantonation's second fund has already invested in 12 startups, with a target portfolio of around 25 companies. Its thesis has expanded beyond quantum computing hardware to encompass the necessary software and industrial application layers, as well as adjacent physics-based technologies like photonics and lasers. Zeng cited Dutch startup Qblox, which makes quantum control hardware, as an example of a supporting company that later became a portfolio investment.
The firm's geographic focus remains international, with investments in French companies like Pasqal and Quandela, as well as bets across Asia and North America. "In a lot of the areas we invest in, there’s not yet a clear regional winner," Zeng noted, attributing this to globally distributed university research.
Investor Confidence and Market Context
The fund attracted returning investors from its first vintage, including Singapore’s Vertex Holdings and Bpifrance’s Fonds National d’Amorçage 2. New limited partners include the European Investment Fund, Grupo ACS, Novo Holdings, Planet First Partners, and Toshiba.
This confidence comes amid a "quantum frenzy" in public markets, with shares of some quantum companies surging recently. This trend has been partly fuelled by comments from Nvidia CEO Jensen Huang, who stated in June 2025 that "quantum computing is reaching an inflection point." Furthermore, dedicated quantum funds like QDNL and 55 North have emerged, and numerous companies entered DARPA’s Quantum Benchmarking Initiative.
The Road to Practical Application
While quantum chips have not yet outperformed classical computers outside specific benchmarks, consensus is growing that real-life applications in fields like life sciences and materials discovery are only a few years away. A key driver is progress in error correction—the ability to fix mistakes inherent to quantum systems. Google's Willow chip in 2024 was a landmark in this area, though no single architecture has yet dominated the field.
Zeng believes that beyond the public market excitement, "there are more exciting technologies that are currently private." He also acknowledged the sector's complexity for investors, stating, "VCs recognize that this is not an easy area to invest in at the early stage. The technology is very specific and complex, the markets are often new, and the teams as well."