IonQ’s Virtual Financial Analyst Day : An Inside Look Part One

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Sometime in the next month or two, after SEC approval is granted, IonQ, Inc. will make history. It will become the first publicly traded pure-play quantum computing stock on the NYSE. Its ticker symbol will be “IONQ.” 

IonQ sponsored a virtual symposium on April 13 for key analysts in the investment community in anticipation of SEC approval. The goal was to give investors a better understanding of quantum computing, IonQ’s potential, and IonQ’s technology and business differentiators. While Moor Insights & Strategy is a technology industry analyst versus financial analyst firm, we routinely attend financial events as they are often the best source of truth.   

This summary is the first of two parts. It contains information about IonQ’s management structure, funding history, and business strategy. Part two will contain IonQ’s technical information and architectural strategy presented at the event and will be published in two weeks.  

IonQ’s management team 

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IonQ was founded in 2015 by Drs. Christopher Monroe and Jungsang Kim, who have spent more than four decades combined researching quantum physics. When the company was founded, Monroe was leading the University of Maryland’s quantum group, and Kim was leading Duke University’s quantum efforts. Today, Monroe is IonQ’s chief scientist and Kim is the CTO. 

Peter Chapman, president and CEO of IonQ, came to IonQ two years ago from Amazon. He was one of two directors who oversaw Amazon Prime’s technology. Before Amazon, Chapman ran a computer company belonging to futurist Ray Kurzweil, who is currently Google’s director of engineering, for seven years.  

Dave Bacon, IonQ’s VP of software, joined the company in October 2020. Bacon came from Google, where he was part of the team that attained quantum supremacy. Quantum supremacy means demonstrating that a quantum computer has executed computational tasks faster on a quantum processor than on a classical processor. Bacon is the co-developer of the Bacon-Shor code for error correction, which reduces the effects of noise in quantum computing. He holds a PhD in Physics from UC Berkeley.  

A scalable error correction solution is critical for the future of the quantum computing industry. It is perhaps the foremost obstacle IonQ must overcome on its way to building a large-scale, commercially applicable computer. Bacon’s expertise and understanding of error correction are invaluable to IonQ in achieving its long-term plans. 

According to feedback from the event’s attendees, it was apparent to them that IonQ has a strong team of technical and business leaders with the right expertise to achieve its goals.  

How the Monroe-Kim Partnership created IonQ’s architecture 

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According to Chris Monroe, trapped-ion computing had its real beginnings in the early 1990s, when he worked at the US government’s advanced atomic clock laboratory. At the time, Monroe was experimenting with quantum entanglement to improve atomic clock performance. 

“We were building small quantum computers before we knew they were quantum computers,” he said. “The field fell into our laps in the mid-90s. We executed the very first quantum operation in any physical platform. It just happened to be trapped ions because it was the most mature technology for atomic clocks at the time.” 

Over the next twenty years, with their complementary interests in trapped ions, Monroe and Jungsang Kim formed a close working relationship. Kim tackled the trapped ion system with an orderly engineering approach that permitted building a scalable system. Monroe concerned himself with more fully understanding the foundational aspects of quantum gates when more ions are added.  

“We perfected the gates,” Monroe said. “And we were starting to build systems. Toward 2010, we began producing high-level blueprints of quantum architectures, and we wrote several papers as well.” 

The research papers attracted government attention along with significant grant money. According to Monroe, “We had over $160 million of federal government grants, mostly from the Department of Defense, the intelligence community, and the National Science Foundation, to build and perfect a quantum computing system based on trapped ions. The high-level architectural papers started becoming less about physics and science, and more about engineering a product.”  

Historical funding  

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In late 2014, the late Harry Weller, a leading venture capitalist at New Enterprise Associates (NEA) with an avid interest in physics, read several research papers by Chris Monroe and Jungsang Kim. Once again, the papers served as funding magnets. To Weller, the research papers read very much like a viable business plan. In 2015, NEA agreed to provide the scientists with $2 million in seed money, and IonQ was born.    

In early 2017, IonQ raised an additional $20 million from GV, Amazon Web Services, and NEA. Two years later, under the guidance of its new CEO and president, Peter Chapman, IonQ raised another $55 million from investors, including Samsung Electronics, Lockheed Martin, Airbus Ventures, Robert Bosch Venture Capital GmbH (RBVC), Hewlett Packard, and Mubadala Capital.  

Later in 2019, Chapman engineered another significant milestone for the company, making IonQ computing accessible via the cloud by establishing relationships with Microsoft Azure and AWS Braket. IonQ remains the only quantum system available on both Microsoft Azure and Amazon’s AWS clouds. 

Since its formation, IonQ management has been efficient and measured in its use of investor funds. IonQ has created six generations of trapped-ion quantum computers since inception, to date using only $52 million of the $84 million raised from private investors.  

IonQ’s new board

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The board includes IonQ leaders Peter Chapman and Jungsang Kim and four representatives from among its long list of high-quality investors. 

Ron Bernal and Blake Byers are long-standing board members representing two of IonQ’s first large investors. Bernal is a venture partner at NEA, which provided IonQ its initial seed funding in 2015. Byers was until recently a general partner with GV, formerly Google Ventures, and has been on the board since IonQ’s series A round.  

Three new members will be added to the board later this year:  

  • Harry You and Niccolo de Masi: executives with dMY Technology Group III, the special purpose acquisition (SPAC) company that facilitated a merger with IonQ as a means to become a publicly traded company on the NYSE.  
  • Craig Barratt: An Independent Board Member. Craig sits on the boards of Atmosic, Calysta, and Intuitive Surgical, and formerly held executive positions at a variety of high-impact hardware and system businesses, including Intel, Google, Barefoot Networks and Atheros. 

IonQ’s advisory board also contains several highly qualified and well-known experts in quantum computing and related technologies, including Nobel laureate David Wineland. 

Business model 

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IonQ has developed its business plan around four different streams of revenue: hardware sales, cloud revenue, direct access with technical support, and partnerships that focus on the co-development of quantum applications. Its target markets are academic, government, and corporate enterprises. 

Analyst Notes 

  1. IonQ has a strong management team that includes pioneers and authorities in trapped-ion technology and error correction.
  2. Being the first publicly traded quantum company on the NYSE has advantages in marketing and in funding. IonQ has already proven it can do a lot with moderate funding by the fact it has built six generations of quantum computers and only used $52 million out of $84 million from early funding.  
  3. Although technical information is not included in Part One, IonQ has a robust and complex architectural and hardware strategy. With the public offering, it will not have a problem funding or executing that strategy. 
  4. Although there have been ample investment funds for quantum computing this year, I expect to see more large deals for some companies as investors rush to get in before public offerings are announced. 
  5. The long-term outlook for IonQ is excellent. 

Note: Moor Insights & Strategy writers and editors may have contributed to this article.