IQM was listed: The share rose by more than 20 percent on the Helsinki stock exchange

Trading in the share started at 15 euros, and after the opening it quickly started to rise. The share price rose to 19 euros shortly after the start of trading, and the value of the share was up by around 26 percent at eleven o’clock in the morning. Before midday, the share’s rise had calmed down to a little over 21 percent.

It is a parallel listing, and trading in the company’s certificates of deposit started in the US on the Nasdaq technology exchange already on Thursday. At the end of the trading day, the value of the share on Nasdaq turned to plus 2.12 percent.

The listing of IQM took place by merging with the spac shell company Real Asset Acquisition Corp (RAAQ), which was already listed on the Nasdaq stock exchange.

Founded in 2018, IQM develops and manufactures quantum computers and related software and service solutions. The company now became the first European quantum computing company to be listed on the US stock exchange.

By listing IQM is looking for growth capital for development work.

With the implementation of the arrangement, IQM’s cash reserves will significantly strengthen to a total of up to 337 million euros.

Of this amount, approximately EUR 119 million is so-called pipe financing, i.e. an additional financing package collected from institutional investors. Some are investors’ funds that were previously in the RAAQ shell company.

The Finnish pension companies Varma and Ilmarinen and the state capital investment company Tesi were significant investors in the additional financing package. Varma says that he has made an additional investment of 40 million dollars in IQM.

Varma has been an investor in IQM since 2022.

Thesis owns nine percent of IQM after the stock exchange listing and is the largest individual owner. It has been involved as an investor in IQM almost since the beginning, i.e. since 2019.

Director responsible for Tes’s growth investments Juha Lehtola comments that Tesi’s goal is to remain the owner for a long time.

“From our point of view, it is important that IQM remains an independent Finnish company. In that case, a stock exchange listing was the most relevant way forward,” says Lehtola.

This spring, Tesin and domestic pension companies have also strengthened their ownership in, for example, the space technology company Iceye.

“In this discussion, we are waking up to how exceptional companies Iceye and IQM are. And we have begun to build an ownership culture in the direction that we are ready for long-term and systematic risk-taking,” says Lehtola.

The quantum industry is still in its early stages, and technological development will require significant investments. Last year, IQM had a turnover of 31.3 million euros and an operating loss of 58.1 million euros.

So far, IQM has sold 23 machines, of which 18 have already been delivered to customers. That makes it the company that has sold the most quantum computers in the world.

“Quantum technology is an extreme example of a field that requires very forward-looking and long-term investments in product development. Then it requires extensive capital behind it and it is effective in the public market,” Lehtola estimates.

On the other hand, the listing also offers liquidity to the shares for those early-stage investors who need to exit their investments within a certain period of time.

From Finns from private equity funds, IQM’s investors have been Open Ocean and Maki.vc. Before the stock exchange listing, Open Ocean owned 3.7 percent of the company and Maki.vc 3.1 percent.

They initially invested together with Tesi in 2019, when IQM raised its first seed stage funding of 11.2 million euros.

“Then they drew up a plan for how the company could develop. Things have gone surprisingly far according to that,” Open Ocean’s partner Tom Henriksson tells.

Before the stock market listing IQM collected no less than 275 million euros in funding last fall. According to Henriksson, that financing round was a necessary milestone, which also enabled the listing now.

The investment bank Goldman Sachs became an advisor, and the company’s value was defined for the first time as more than one billion dollars. So it got the status of a unicorn. At the same time, significant US investment funds joined.

During the stock exchange listing, the investment bank BlackRock announced a EUR 50 million investment in IQM.

“When we start doing a stock market listing in the Yankees, names like this are super important. They bring credibility and have a big meaning,” says Henriksson.

In quantum technology, listing on the stock exchange specifically through the spac arrangement has become the industry standard. After 2021, seven quantum computer companies have listed on the stock exchange through spac arrangements.

“The market also had good timing, when the valuation levels of the controllers grew enormously. So the market has had faith in the future of this technology,” adds Henriksson.

In relation to the closest listed peers, IQM’s valuation level is still quite moderate. For example, IonQ’s market value is 19.8 billion dollars and Rigetti Computing’s is 6.4 billion dollars. However, with the exception of IonQ, the turnover of competitors lags behind IQM.

According to Henriksson, it is a kind of “European discount”.

“There is still a significant valuation difference between the biggest competitors and IQM. But no one else has sold as many systems and only IonQ has a higher turnover,” commented Henriksson.

According to Henriksson, it has been challenging for a European deep tech technology company to raise funding over the years.

“I hope that this will now become an example for the rest of the world, that successful technology companies can be built from Europe,” says Henriksson.