UK quantum start-ups urge state fund to halt talent exodus
A senior figure in the UK's quantum technology sector has warned that British start-ups may increasingly relocate overseas unless the government introduces substantial new investment mechanisms. The warning comes after several high-profile departures or acquisitions of UK-based quantum firms.
Recent departures
This year has seen companies such as PsiQuantum, originally spun out from Bristol University, focusing its scaling efforts primarily in the US. Universal Quantum has moved operations to Hamburg, and Oxford Ionics was acquired by US-based IonQ. These moves highlight the growing appeal of international markets for British quantum start-ups seeking opportunities to scale.
Funding challenges
Industry leaders say the loss of these firms is symptomatic of the wider issue of limited access to growth-stage capital in the UK. While early-stage grants and challenge funds are available, they may not provide sufficient support for companies needing to expand rapidly from initial concept to commercial deployment.
"The UK has made real progress in supporting quantum innovation, but the reality is that many start-ups are starved of the capital needed to scale at pace. Grants and challenge funds help get ideas off the ground, but they don't bridge the gap between ideation and rapid commercial scale," said Lisa Matthews, Chief Executive Officer, KETS Quantum Security.
Call for action
Matthews argues that a state-backed Quantum Sovereign Wealth Fund is necessary to stem the outflow of talent and technology, safeguarding not only economic opportunities but also critical national infrastructure tied to quantum technologies.
She maintains that current funding mechanisms do not offer sufficient long-term or substantial investment to compete with global counterparts. Countries such as China, Germany, France, Denmark, Japan, Singapore, South Korea, and the United States have launched targeted venture vehicles to deploy public funds directly into quantum enterprises.
"Announcing a Quantum Sovereign Wealth Fund during the Budget Speech is a necessity to prevent a mass exodus of British innovation and prosperity, and to avoid ceding control of critical quantum technologies. It would act as the long-term investment engine into the UK's quantum future, creating an ecosystem where quantum start-ups can thrive commercially, rather than relocating to the likes of the US, or mainland Europe," said Matthews.
Global landscape
The growing international competition for quantum technology companies is underscored by the moves of other governments to take equity stakes in homegrown quantum firms. Industry leaders believe that without similar instruments in the UK, the country's role may be restricted to fundamental research, missing out on the commercialisation and operational control of critical intellectual property.
"We are falling behind in the global equity markets, with China, the EU, Germany, France, Denmark, Japan, Singapore, and South Korea all already having venture vehicles to deploy public funds directly into quantum technologies. The US has also announced recent plans to take equity stakes in home-grown quantum companies. Companies source equity globally, and we have to keep up," said Matthews.
Implications for security
The concern extends beyond economic loss. Quantum technologies are considered integral to the security of communications and national infrastructure. Without domestic commercial scale, reliance on overseas suppliers could expose the UK to strategic vulnerabilities.
"By launching a Quantum Sovereign Wealth Fund, the UK government can not only safeguard critical IP but send a powerful message to global investors: the UK is serious about leading the way on quantum deployment and growth. Without change, the UK will remain the world's R&D centre, but see none of the profits, and will relinquish control of its national security. World class research will be scaled abroad or sold off before it comes close to reaching its full potential on home soil," said Matthews.
