Cybersecurity in the age of quantum: Our investment in PQShield

July 8, 2020

PQShield announced their latest funding round today in the Business Insider. Matthew Arnold, Principal at Oxford Science Enterprises, discusses our investment in the company and cybersecurity in the quantum age.


Governments and companies are currently investing vast sums in the race to harness the power of quantum computers. So far in 2020, quantum computing startups have already received over $300m of funding in the US alone. This doesn’t even count the likes of Google, which has already shown that its quantum computer can do things that conventional computers cannot (albeit in an example with limited uses). Meaningfully useful quantum computers seem no longer a hypothetical, but a near future.

The arrival of these machines should revolutionise problem-solving in domains like drug discovery, physics, and process optimization, but will also pose unprecedented security risks. It has been demonstrated comprehensively that, at scale, they will be able to break most traditional encryption schemes and thus threaten the security of all digital information. Whilst the potential of a cure for cancer and a cleaner energy future enabled by catalysts discovered with quantum computers is enticing, a future without secure electronic communication is a frightening possibility.

Researchers, both academic and corporate, are trying to address this with provably secure quantum communications. These will have a place if they can be made robust, and some real breakthroughs are being made, but they will likely remain expensive and disruptive to roll out at best and may not scale down to the size of phones, wearables and IoT devices.

But this is not the only way. PQShield is dedicated to ensuring that private information can be secured forever with today’s technology. This what we call post-quantum cryptography. PQShield is part of a well-advanced standardisation process that the US government has tasked the National Institute of Standards and Technology (NIST) with running. (20 years ago NIST ran a similar process to create the ubiquitous Advanced Encryption Standard – one of the few popular encryption algorithms that can claim to be secure in a post-quantum world).

Almost every single computing device on the planet will need to be post-quantum secured eventually. Many of these already embed a hardware accelerator called a crypto coprocessor which will require a fundamental redesign to handle the esoteric new mathematical schemes used in post-quantum encryption. Penetration of crypto coprocessors will need to increase as the post-quantum math is more compute-intensive than before. Whilst the core encryption algorithms will be FRAND licenced, the implementations in hardware and software will be commercially licensed and supported.

We expect the bulk of the adoption to be driven by regulatory mandates (e.g. banking, healthcare and military) which will follow the conclusion of the NIST process (with some lag for switchover). But forward-thinking engineers and leaders are already exploring the area, aware that if they can build the new technology into their current hardware and software refresh cycles, they can reduce the cost to implement and steal a march on their competitors when the regulations are announced.


Why we invested in PQShield

As with many fundamental technologies, the market will take time to fully mature. However, we believe the companies taking part in the NIST standardization process will be in pole position to lead the commercialization process, as long as they can build what customers need. We are willing to trade early traction for long term impact, and we share this vision with the founding team.

That’s why, today, we are delighted to see our portfolio company PQShield announce £5.5m of seed funding led by new investors Kindred Capital and Crane Venture Partners, who share our patient and focussed approach to this looming problem.

We first met PQShield founder Dr Ali El Kaafarani in 2017, when he was a Research Fellow at the Maths Institute. Since then, we’ve had the privilege of seeing him build a business, and transition from full time researcher to commercial leader. Building a business in a deeply scientific area is difficult, but Ali’s tenacity and vision has enabled him to assemble the best technical talent in the sector. The proof of this is that PQShield is involved in more schemes than any other company in the NIST process. And this is not just an academic exercise – they have already released a software and hardware acceleration platform that implements all of the schemes and put it in the hands of beta customers like Bosch. This is why we believe PQShield has the potential to be a leader in post-quantum cryptography, and we’re thrilled that investors like Kindred and Crane also recognise this potential.


Matthew Arnold, Principal at Oxford Science Enterprises

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