The UK’s quantum computing sector is entering a pivotal phase, with its leading start-ups positioning themselves to shape the next wave of technological transformation rather than becoming early acquisition targets for US tech giants.
Ian Hogarth, co-founder of the quantum algorithms company Phasecraft, believes the industry is approaching a moment similar to artificial intelligence’s explosive rise in the mid-2010s. “There will be a moment of realisation,” he says, warning that when valuations surge, companies must “hold their nerve.”
A Nascent Industry on the Brink
Quantum computing — long more theory than practice — is edging closer to commercial reality. Google’s claim of achieving “quantum advantage,” where quantum systems outperform classical computers, signals that the technology could soon shift from experimentation to practical use.
This progress presents both opportunity and risk for Britain’s young quantum industry. The UK has cultivated a strong research base at universities such as Cambridge, Bristol, and University College London, which have produced spinouts like Phasecraft and Riverlane. The key question is whether these start-ups can remain independent and scale into global leaders — or follow the path of acquisition, as DeepMind did when Google bought it for £400 million in 2014.
There are already signs of consolidation: in June, Oxford Ionics was acquired by US-based IonQ for $1.1 billion.
Software Over Hardware
Unlike companies focused on building quantum machines, UK start-ups such as Phasecraft and Riverlane are developing the algorithms and software needed to make quantum computers useful. This strategy provides two clear advantages: flexibility and lower capital costs.
Software firms can collaborate with multiple hardware makers — from IBM to Google — instead of betting on a single model of quantum computing. “There are many hardware efforts and one or more horses will pull ahead over time,” Hogarth said.
Developing software also requires less investment than constructing hardware, allowing the UK to draw on its historical strength in computing and cryptography. Phasecraft, founded in 2019, has raised $34 million in Series B funding and is exploring applications in materials science and renewable energy systems, including work with the UK National Energy Systems Operator to model complex energy grids.
Riverlane, founded in 2016, focuses on error correction — one of quantum computing’s biggest technical challenges.
Academic Roots, Commercial Ambitions
Many of Britain’s quantum leaders still straddle academia and business. Phasecraft’s CEO, Ashley Montanaro, is a professor of quantum computation at the University of Bristol. He argues that remaining independent is both feasible and necessary for long-term success: “There’s no reason why a quantum software company cannot stay independent for the long term.”
Innovation Versus Scale
Government innovation agency Innovate UK’s quantum technologies director, Roger McKinlay, says start-ups have an edge in creativity and agility. “Sometimes independent thinkers just move faster. They can wake up in the morning and pivot,” he noted.
Still, he acknowledges that large-scale capital and resources may eventually determine who leads. “More acquisitions are inevitable,” McKinlay said, emphasizing that Britain’s priority should be giving its start-ups time to mature while protecting the country’s research base. “It really matters whether your children leave home in their teens or twenties.”
Holding the Nerve
For now, the UK has carved out a distinctive strength in quantum software — the bridge between theory and application. The challenge for its entrepreneurs and investors will be resisting premature buyouts and building global influence from home.
As Hogarth puts it, Britain’s quantum sector may already possess its own form of “quantum advantage.” The task ahead is simply to hold its nerve long enough to prove it.
