Quantum computing will not be replacing supercomputers in 2026, let alone reaching industrial scale. And yet, investor appetite for companies pursuing the elusive quantum advantage hasn’t dwindled — it has increased.

Quantonation Ventures, a venture firm investing in quantum and physics-based startups, has closed its oversubscribed second fund at €220 million, or approximately $260 million. That’s more than twice the size of its inaugural fund, and comes in addition to other signals that the quantum winter isn’t coming yet.

While some warned that too much quantum hype and not enough tangible outcomes would eventually cause funding to collapse, the opposite has happened. Take the prediction that quantum will eventually crack modern encryption: that moment has no clear timeline, and yet governments have joined Big Tech in the race.

In the years since Quantonation’s launch in 2018, the quantum technology sector has become less incipient, with both technological breakthroughs and early demand from academic and industrial labs. As a result, there has also been “a shift in the types of investment opportunities that are available” to its second fund, Quantonation partner Will Zeng told TechCrunch. 

One example is what Zeng describes as the “picks and shovels” opportunity, with companies developing technologies that support the quantum industry. He cited the example of Dutch startup Qblox, a long-boostrapped company that was selling quantum control hardware and software to Quantonation portfolio companies before the VC firm co-led its Series A.

This growing ecosystem also explains why backers are doubling down on Quantonation, and why other dedicated quantum funds such as QDNL and 55 North have emerged.

“VCs recognize that this is not an easy area to invest in at the early stage. The technology is very specific and complex, the markets are often new, and the teams as well,” Zeng said.

The firm’s thesis is to invest early to capture more value; but a handful of quantum companies have already gone public, and their shares have surged in recent months. According to Bloomberg, this “quantum frenzy” is partly stocked by Nvidia, whose CEO Jensen Huang declared in June 2025 that “quantum computing is reaching an inflection point.”

Despite the fact that quantum chips have yet to outperform classical computers outside of purpose-built benchmarks, consensus is growing that real-life applications are only a few years away, from life sciences to new materials. That’s in part thanks to advancements in error correction — the ability to fix the mistakes that quantum systems are prone to.

Google’s Willow chip was a landmark for error correction in 2024, but no architecture has won yet, and smaller players are still in the race. Zeng noted that a surprising number of companies have entered DARPA’s Quantum Benchmarking Initiative. He also believes that beyond the public market excitement, “there are more exciting technologies that are currently private.”

For Quantonation, those private opportunities span a wider canvas than quantum chips alone. Fund two has already invested in 12 startups, with a target portfolio of around 25, covering not just the software and industrial layers needed to make quantum advantage real, but also adjacent physics-based technologies such as photonics and lasers.

This expanded thesis is backed by investors old and new. According to the firm, major investors from its first vintage, including Singapore’s Vertex Holdings and Bpifrance’s Fonds National d’Amorçage 2, have returned for the second fund, with new limited partners including the European Investment Fund, Grupo ACS, Novo Holdings, Planet First Partners, and Toshiba.

Quantonation’s geographic scope is equally international. With dual headquarters in Paris and New York City, the firm has backed French quantum companies including Pasqal and Quandela, but also placed bets in Asia and North America — and will continue doing so.

“In a lot of the areas we invest in, there’s not yet a clear regional winner, […] and a lot of the research has come from universities in many places,” Zeng said.