The deal values Arqit at $1.4bn (€1.16bn) and raises $400m (€330m) for the development and launch of two satellites by 2023. These satellites will use its post-quantum encryption technology called QuantumCloud that the company says can protect communications links of any networked device secure against current and future forms of hacking, even from a quantum computer.
The deal with Centricus Acquisition Corp includes current business partners Virgin Orbit and Sumitomo, and Centricus sponsor Heritage Group. The merged company will be called Arqit Quantum Inc and willl be headquartered in the Cayman Islands with a listing on the NASDAQ stock exchange in the US. The company says its ‘operatonal HQ’ will remainin the UK.
Arqit has developed a way to create more secure symmetric keys when they are needed, at scale, securely, at any kind of end point device and in groups of any size. Current customers include the UK Government, the European Space Agency, BT, and Sumitomo. Verizon, BP, Northrop Grumman and Iridium are currently testing the use of Arqit’s technologies in different ways.
“Arqit’s business combination transaction represents a huge moment for the UK spacetech ecosystem,” said James Bruegger, Chief Investment Officer at Seraphim Capital. “Arqit will be the first UK SpaceTech company to enter into a business combination transaction with a US publicly listed SPAC, in less than 5 years since its inception. Arqit is an excellent showcase for the UK’s ability to produce world-leading companies in cutting edge areas such as quantum cybersecurity technology and Spacetech.”
SPAC deals have become increasingly popular, with UK electric vehicle maker Arrival and Dublin-registered GaN chip maker Navitas both signed deals in the last month.
“Our research indicates that the SpaceTech industry has become one of the most sought-after markets for SPAC mergers,” said Bruegger at Seraphim, which backed Arqit as well as ICeye in Finland and AT&S. “By the first quarter of 2021, 11 space-related companies have already announced their intention to undertake transactions with SPACs. The industry finds itself at a watershed moment, and the transformative potential of SpaceTech is now accepted within the investment community, with SPAC transactions as the main means of accelerating their ability to access the capital required to realise their visions.”
“Having first backed Arqit in its seed round in 2018, Seraphim Capital has invested in every round since and are proud to have supported Arqit’s journey to become one of the most exciting cybersecurity companies in the world,” he said.
Arqit’s QuantumCloud puts a small software agent at any end point device. This software creates an unlimited number of symmetric keys with partner devices. The system currently uses source keys which are originated in data centres, however by 2023 it plans to launch two quantum satellites to assume that role.
Those satellites will use a new quantum protocol developed by Arqit as the backbone of secure keys within data centres all over the world. This would allow a user to create an infinite number of symmetric key pairs, in groups as large as are needed. Keys are never “delivered”, so they cannot be intercepted. They are created at the end points and therefore can never be known by third parties. They can be used only once if necessary and replaced frequently n a self-service basis, ,aking it easily scalable.
“The world needs simpler, stronger cyber security, and Arqit addresses that need. After four years of innovation in stealth mode by a world leading multi- disciplinary teams of scientists and engineers, we are ready to go to market,” said David Williams, CEO of Arqit. “This technology is important and we need to take it to hyperscale as quickly as possible, because the problems we solve are problems for everyone. The capital from this transaction will enable us to develop critical relationships with existing and new customers and fully scale our platform as a service with a balance sheet which gives us speed, momentum and the resilience to deliver on our commitments to customers for the long term.”
“This transaction will give Arqit the ability to establish itself as a leader in the encryption space – the prospect of the threat from quantum computing will serve to accelerate the broad adoption of Arqit technology,” said Garth Ritchie, CEO of of the SPAC vehicle Centricus. “This is a deep tech company which is many years ahead of the market. Arqit has protected its IP by remaining in stealth mode whilst filing over 1,000 claims on more than a dozen patent applications. It is thanks to funding from the British Government and its VC partners that Arqit is now ready to commercialise and scale its product suite; this will complement an already strong cohort of launch customers. The executive and advisory team are a ‘transatlantic who’s who’ of relevant cybersecurity, space and military experience – this team also enjoys peerless access to relevant enterprise customers.”
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