Oxford-based PQShield, a post-quantum cryptography startup

Oxford-based PQShield, a post-quantum cryptography startup, has announced it raised $37 million in a Series B funding round led by Addition. The company, founded in 2018, specializes in developing quantum-ready hardware, software, and communication technologies designed to protect against quantum threats to existing digital cryptography. This form of cryptography is integral to numerous internet browsers, corporate databases, and connected devices, including vehicles and aircraft.

The funding announcement aligns with the upcoming ratification of the National Institute of Standards and Technology (NIST)’s post-quantum cryptography standards in the US, which will require companies to adhere to new quantum-resistant regulations. Major tech firms such as Apple, Meta, Zoom, and Signal have already initiated their transition to post-quantum cryptography.

PQShield's CEO, Ali El Kaafarani, emphasizes that the move to post-quantum cryptography is no longer just about risk assessment but compliance, especially with the impending official standards. PQShield's clientele includes notable companies like AMD, Microchip Technologies, Collins Aerospace, and Lattice Semiconductor. The startup provides a mix of software and hardware design solutions and offers guidance to businesses and governments on transitioning to quantum security.

Quantum computers pose a significant threat to traditional cryptography methods like RSA and Elliptic Curve Cryptography (ECC), which were originally designed to resist attacks from classical computers. Quantum computers can potentially break these methods due to their advanced mathematical capabilities.

The pursuit of a fully functional quantum computer involves major players such as Google and IBM, along with over 147 startups in Europe. In 2023, startups in the quantum technology sector across EMEA raised $781 million.

While there's a slim chance that a practical quantum computer may never come to fruition, El Kaafarani believes the probability is high enough to warrant precautionary measures. With the new funding, PQShield aims to enhance its market position by boosting technical talent and commercial capacity. El Kaafarani acknowledges that recruiting skilled professionals in cryptography, a field that blends computer science, mathematics, hardware, software, and some physics, is one of the most challenging aspects of operating a cryptography firm.