Finnish quantum firm IQM lists on Nasdaq via SPAC merger

Finnish quantum computer developer IQM has made its public debut in the United States, commencing trading on the Nasdaq technology exchange. The listing was achieved through a merger with Real Asset Acquisition Corp (RAAQ), a special purpose acquisition company already listed on Nasdaq.

This SPAC route offers a lighter path to public markets compared to a traditional initial public offering. IQM is pursuing a dual listing, with trading on the Helsinki Stock Exchange set to begin Friday morning. This makes IQM one of the few Finnish companies, alongside Nokia, to be listed on both exchanges.

The company's market capitalization stands at approximately $1.9 billion (about 1.7 billion euros) upon listing. This valuation is considered high relative to its 2023 revenue of 31.3 million euros. Quantum technology remains in its early stages, requiring significant time and investment for commercial breakthroughs, meaning current valuations are largely based on future expectations.

Despite the high valuation, IQM's market position appears moderate when compared to rivals such as IonQ, valued at $19.8 billion, and Rigetti Computing, at $6.4 billion. However, aside from IonQ, these competitors have lower revenues than IQM. Fund manager Henri Blomster notes that valuations for quantum technology companies are generally expensive given their developmental stage, questioning the customer base size for consistent revenue. He considers IQM too early-stage for his Asilo Argo fund.

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Now the customers are mainly universities and research institutions. I see a risk that the mass is not large enough for consistent revenue. In the longer term, things have to succeed for the valuation to be justified.