Exclusive: $1.4bn start-up to launch ‘ultra-secure’ quantum telecoms
A start-up company that is expected to be valued at US$1.4 billion by the end of August is launching its quantum-based telecoms encryption service in the middle of July.
Arqit, founded by satellite entrepreneur David Williams (pictured), will launch QuantumCloud, a platform-as-a-service (PaaS) for telecoms including consumer, industrial and defence internet of things (IoT) in “the next week or two”, he told Capacity in an exclusive interview.
Early customers, including BT and other telcos that he didn’t want to name, have already signed contracts and used the cyber secutiry software, but Arqit is likely to be thrust into greater prominence immediately after, when a Nasdaq-listed special purpose acquisition company (SPAC) buys it in a deal that will value it at US$1.4 billion.
Williams and “a small number” of co-founders will own 45%, he told Capacity — a stake that will be worth $630 million to him and his colleagues.
A former banker, Williams, who is chairman of Arqit, was founder and CEO of Avanti, a UK-based company that runs a fleet of geostationary satellites called Hylas — with government, military and commercial customers. He left in August 2017 and a month later set up Arqit.
“We’ve invented a method of creating unbreakable encryption keys locally, both at the edge and in the cloud.” These are what he called “trustless”, a term by which he means will never be stored in any system, so cannot be stolen, but they can be put on devices within “less than half a second” to enable a high level of security.
Arqit can deliver QuantumCloud keys in “unlimited group sizes”, he said. “For example, to international telecoms networks, and we can change the key every second if we want.” He said that would result in ultra-secure software defined networks (SDNs).
“We can deliver quantum keys in a manner that’s global and trustless,” said Williams. The company will use a small fleet of satellites, weighing 300kg each, that is being built by QinetiQ, a company formed 20 years ago by the privatisation of part of the UK government’s Defence Evaluation and Research Agency.
BT has an exclusive deal to distribute Arqit’s QuantumCloud services in the UK, and the Japanese firm Sumitomo has a deal as “the first big international customer”, said Williams. It is working with telcos to encrypt traffic on Japanese fibre cables, he said.
These are contracts with distributors that have been signed, but the company’s first contract with a corporate user went live on Monday, said Williams, but he could not name the partner, “except that it is a big global corporation”. It is “an enterprise customer” and is not BT.
The eventual market will include the internet of things (IoT) and connected cars, enterprise and connectivity, he said. Cost will be low, said Williams. “Users will pay a tiny fraction of a dollar for each key created.”
After the merger deal, Arqit will combine with Nasdaq-listed Centricus Acquisition, a SPAC. When the deal is closed, a newly formed company, Arqit Quantum, will merge with Centricus, acquire the original Arqit and register its shares for listing on Nasdaq.
Capacity will publish a full interview will Williams in the next issue of the magazine.