THE European Union is expected to release a draft Quantum Act in the second quarter as part of efforts to strengthen its position in emerging technologies, but concerns remain over limited private sector funding.
Data from the European Commission show that only 5 percent of private capital is allocated to quantum computing companies in Europe, compared with 50 percent in the United States, highlighting a significant investment gap.
Recent activity suggests growing interest among investors. Paris-based Quantonation recently launched a €220 million fund focused on quantum computing, while Danish firm 55North introduced a €300 million fund for quantum startups.
At the same time, Finland-based IQM has announced plans to go public in the United States through a special purpose acquisition company merger, potentially making it one of the first publicly listed European quantum computing companies.
The proposed Quantum Act is intended to address structural challenges, including fragmented markets and limited private funding, to help position Europe as a leader in quantum technologies.
“Europe already lags behind many US companies and universities, which are already advanced in the quantum field. If Europe does not want to lose the quantum race to the US and China, as it does in AI, it must first give startups the freedom to move fast and avoid burdening them with regulation in a market that is still taking shape. Any regulation now would only slow the growth of the quantum sector,” said Daiva Rakauskaitė, partner and fund manager at Aneli Capital.
A report from McKinsey estimates that quantum technologies — including computing, communication and sensing — could generate up to $97 billion in global revenue by 2035, with potential applications across industries such as materials development, finance and cybersecurity.
However, the technology also poses long-term risks. Future quantum systems could weaken existing encryption methods, raising concerns for current information technology infrastructure.
“While it is impossible to predict when scientists will make the next major quantum breakthrough, Europe’s biggest mistake would be to wait passively for it. Companies working in sectors like pharmacy, finance and logistics should already be running pilots and testing practical use cases to understand where quantum can create value,” Rakauskaitė said.
She said Europe has strong research institutions, technical talent and public support programs, but must improve its ability to convert these into commercially viable companies.
Increasing private investment will be critical to accelerating commercialization, including encouraging more capital from institutional investors such as pension and endowment funds, which currently represent only a small share of venture capital despite Europe’s estimated €3 trillion in pension assets.
Public funding, she added, will remain essential in supporting early-stage development and helping startups attract private investment over time.