Quantum computing has long focused on hardware and scalability, but now, as the technology becomes ever more promising and concrete, software is starting to draw more interest. Recently, Phasecraft, a UK-based quantum startup that develops quantum algorithms, raised $34 million from investors, including a fund linked to Novo Nordisk (NVO). The company has developed a way to apply density function theory more efficiently, which could lead to better tools for research. The deal highlights a shift in where capital is flowing, as more firms view quantum software as a means to unlock value sooner.
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Compared to hardware, software funding remains smaller. Still, the Phasecraft round shows that investors are watching for signs of progress. As hardware slowly improves, software may help speed up the timeline for valuable results. This trend is also seen in Riverlane, another UK-based quantum software firm gaining traction.
Algorithm Advances and Market Outlook
One reason for the shift is that quantum algorithms have become more efficient. For example, recent work has cut the size of machines needed to run Shor’s algorithm, a quantum method that can quickly find the prime factors of large numbers, which could one day help break encryption much faster than today’s best classical computers. These gains mean that quantum computers may be able to solve real-world problems with fewer resources than before.
In practice, early use cases are likely to focus on chemistry and materials science. Quantum systems are well-suited to model atoms and molecules, which could help improve battery materials or support drug discovery.
Looking ahead, experts expect the first benefits to show up in fields like climate science and energy. Lithium atoms, which are small and easier to model, may be a starting point for new battery tech. Drug firms are also watching closely, as quantum tools may help speed up the search for new treatments.
Still, hardware remains a hurdle. While software is moving fast, machines are not yet ready to run many of these new algorithms. For now, gains will likely be felt in the labs and industry, rather than in broader markets. Even so, the steady pace of progress suggests that software and hardware may soon meet at a point where quantum computing becomes more practical.
We used TipRanks’ Comparison Tool to line up some of the top quantum stocks. Of course, most quantum stocks also engage in software development, in addition to hardware development. It’s an easy way to see how they compare and get a sense of where the space might be headed.
