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Trained at Goldman Sachs as an analyst and then did fixed-income and multi-strategy arbitrage for hedge fund Mariner Investment Group before starting his own hedge fund. Specialize in special situations and market neutral quantitative strategies.
  • Harris & Harris Portfolio Company D-Wave To IPO: Quantum Computing Pioneer Looks To IPO 2 comments
    Aug 19, 2014 8:30 AM | about stocks: TINY, GS, AMZN, IBM, GOOG

    This somehow got by unnoticed by me

    2 recent articles (FT & IEEE) reporting that D-Wave on verge of finally filing for an IPO - D-Wave is very much anticipated and long awaited - also very controversial in the way that Tesla and Netflix are. D-Wave is potentially game changing and revolutionary jump in computing which means that although TINY only owns 5% it could be one of the IPOs where people want to get in and will buy TINY to do so. D-Wave's other investors include GS and AMZN

    Quantum computing pioneer looks to IPO

    The Canadian technology company which claims to be the first to have tapped the revolutionary power of quantum computing could seek a stock market listing within "a couple of years", according to its chief executive.

    D-Wave Systems' ambition for an initial public offering comes despite recent controversy prompted by a research paper alleging that its systems don't register any speed improvements over current computer technology.

    Companies including IBM and Microsoft have significant long-range research efforts in quantum computing, which seeks to bring massive advances over existing technology by harnessing the quantum effects of subatomic particles. However, only D-Wave claims to have produced a working system.

    A stock market listing would provide an exit for investors who have had a long-term stake in the 15-year-old company, including Goldman Sachs, venture capital firm Draper Fisher Jurvetson and the Canadian government.

    Vern Brownell, chief executive, described D-Wave's backers as "visionary and patient" and said they had been ready to take a long-term bet. However, he indicated that the company hoped it would soon be in a position for an IPO and said it had doubled its revenue each year since it sold its first system to Lockheed Martin in 2010.

    Although it has sold only one other system - to Google and Nasa last year - D-Wave also makes money from renting out capacity on quantum computers it runs in-house, as well as from professional services.

    On Friday, D-Wave announced a $30m round of private investment, taking the total it has raised to $160m. The money has been earmarked to create new tools for software developers because the difficulty of writing a different form of code for the new class of computers threatens to limit their usefulness.

    Quantum processors rely on subatomic effects such as superpositioning, in which an electron can be in more than one state at the same time. This frees them from the limits of the "on/off", or 1 or a 0, at the heart of classical computing and makes many different calculations possible at the same time. It promises a new class of machines.

    D-Wave suffered a setback earlier this year after independent research claimed that its systems failed to show any of the improvements in computing speed that should be possible with quantum computing.

    Mr Brownell countered that the tests behind the research had not touched on the main features of his company's systems. "It's not indicative of anything fundamental with the technology," he said.

    D-Wave responded with a paper of its own in May, co-authored with researchers at University of Southern California, claiming to have proved that its machines exhibit at least one quantum effect, known as entanglement.

    "By and large, the question of whether or not this is a quantum computer has been answered. Now the question is how powerful this computer will become in subsequent generations," Mr Brownell said.

    Besides being an investor, Goldman Sachs also has a strategic interest in the technology, said Mr Brownell, who was the bank's chief technology office until 2000.

    Although he refused to explain how the bank was using D-Wave's technology, he did say that value at risk calculations are among the most computing-intensive tasks undertaken by investment banks.

    Another article which confirms this is

    Quantum Computing IPO on the Horizon

    Investors longing to own a piece of the quantum computing future could get their chance in the next several years. A stock market listing could be on the way for D-Wave Systems, the Canadian company that has built what it describes as the world's first commercial quantum computers.

    The company aims to have an initial public offering within a "couple of years," said Vern Brownell, CEO of D-Wave, in a Financial Times interview. That optimistic view comes despite the fact that in recent studies D-Wave's approach to quantum computing has yet to prove it can outperform classical computing, most recently in a paper in the 19 June 2014 issue of the journal Science. Still, D-Wave has already found customers willing to lease its quantum computing machines-Google, NASA, and Lockheed Martin. And these customers have helped double the company's revenue each year since it sold its first machine to Lockheed Martin in 2010.

    Corporations such as Google and Lockheed Martin may be willing to bet on D-Wave's machines because the potential payoff could be huge. Unlike classical computing that represents information as bits of either a 1 or 0, quantum computers can perform many simultaneous calculations using quantum bits (qubits) that can exist as both a 1 and 0 at the same time. That means quantum computing holds the promise of tackling tough problems that would take classical computers forever to solve.

    Most quantum computing labs have only built devices consisting of a few qubits, because they want to develop error-correction techniques that can protect the delicate quantum states and ensure accurate computer calculations before building bigger machines. In contrast, D-Wave has already built machines as large as 512 qubits based on "quantum annealing" architecture-an approach that D-Wave says is fairly resistant to quantum computing errors. (For more, see IEEE Spectrum's recent look at D-Wave's quantum computing hardware.)

    But bigger quantum computing arrays have not translated into definitive success just yet. D-Wave's machines have not demonstrated "speedup" over classical computers in benchmark tests conducted by academic researchers during the past year or so.

    Still, D-Wave has not apparently had any trouble raising private investments to continue building larger machines. The company recently announced it had received $30 million in funding from both old and new investors-including Goldman Sachs, BDC Capital, Harris & Harris Group, and DFJ-for a total of $160 million overall so far. If the company can demonstrate some progress on its particular quantum computing path in the next few years, any future IPO could potentially become a very big deal.

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Comments (2)
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  • SoundView Technology Group
    , contributor
    Comments (526) | Send Message
    A D-Wave IPO would be fascinating. I've doubts about them being able to pull it off but if the revenue and margins are there then... let her rip.


    We wrote a research report on the company a couple years back. Really cool and controversial technology.
    25 Aug 2014, 08:15 AM Reply Like
  • WallStArb
    , contributor
    Comments (22) | Send Message
    Author’s reply » D-WAVE would be very controversial as far as IPO goes - people dont even think that the concept works - might be good though for generating a lot of buzz... D-Wave's investors are a who's who in computing with Google and Amazon
    25 Aug 2014, 01:57 PM Reply Like
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