Quantum Startup Backed by BlackBerry Co-Founder Gets $10 Million
(Bloomberg) -- A Canadian startup backed by BlackBerry Ltd. co-founder Mike Lazaridis has raised $10 million to fund further growth.
Silicon Valley venture capital firm Shasta Ventures led the investment round in Isara Corp., which sells encryption technology to protect data from the threat of hackers armed with quantum computers.
The money will fund Isara’s product development, as well as new hires in areas like marketing, sales and business development. The startup expects to have about 60 employees by late 2019, up from roughly 40 now.
Once the realm of science fiction, several companies have built working quantum computers in recent years. While a standard computer encodes information in a binary format called a bit that can represent either a 0 or 1, a quantum computer uses quantum bits, or qubits, that can represent both a 0 and 1 at the same time. This, in theory, makes them a lot more powerful.
These machines can’t break modern encryption systems yet. However, the National Security Agency warned in 2016 that the U.S. government and companies that do business with it must ensure that the next generation of encryption is resistant to attacks from quantum computers.
That’s spurred demand for encryption based on different kinds of mathematics, making them less vulnerable to quantum-fueled hacks. Companies like Isara, based in Waterloo, Ontario, are seeking to commercialize these "post-quantum" algorithms.
Many of the Isara team are veterans of BlackBerry’s security unit. BlackBerry, also based in Waterloo, stopped making handsets in 2016. But when it was a top phone maker, its hard-to-hack encryption was a chief selling point.
"I know from personal experience that this is arguably the best encryption team in the world," said Nitin Chopra, a partner at Shasta Ventures and a former BlackBerry product manager. "These guys just know how to write good code and that gets discounted too often in Silicon Valley."
Isara previously raised $11.56 million from Quantum Valley Investments, a fund established by Lazaridis. He’s trying to establish Waterloo as a global center for the commercialization of quantum-related technology.
Isara reduced the time it takes to create an encryption key for a banking transaction to as little as 300 milliseconds, about as long as it takes to blink. That compares to two hours when the company began working on it four years ago, according to Scott Totzke, Isara’s chief executive officer and a former security executive at BlackBerry.
BlackBerry itself has become one of Isara’s early customers. Other clients include Volkswagen AG, digital security company Gemalto and DigiCert, which verifies the authenticity of websites.
©2018 Bloomberg L.P.