AMD is participating! Xanadu plans to use SPAC to go public in the US to seize the first share in pure photonic quantum computing

The Zhitong Finance App learned that Xanadu Quantum Technologies, Inc., a large Canadian subsidiary computing company, recently announced that it will land on the NASDAQ through a merger with the special purpose acquisition company (SPAC) Crane Harbor Acquisition (CHAC.US). The transaction valued Xanadu's equity before capital injection at US$3 billion. After the merger, the new company's corporate value was approximately US$3.1 billion, with a corresponding market value of US$3.6 billion.

According to a statement issued on Monday, if Crane Harbor's public shareholders do not exercise their right of redemption, the combined company will receive approximately US$225 million in trust account funds. Meanwhile, through simultaneous private placement (PIPE), institutional investors participating in the transaction will subscribe for shares in the new company at a price of $10 per share, which will bring in US$275 million in capital injections. Notably, more than 90% of the capital raised by PIPE came from new investors without Xanadu shares, including AMD (AMD.US), BMO Global Asset Management, CIBC Asset Management, MMCAP Ventures, Planet First Partners, and Polar Asset Management Partners.

The company said that the net proceeds from this transaction will be used to accelerate the development and deployment of photonic quantum computer systems, ultimately achieve full fault tolerance, and achieve subsequent commercial implementation through run-time sales and commercialization of PennyLane software.

Christian Weedbrook, CEO of the company, said in an interview that the funds raised will be used to expand hardware facilities, with the ultimate goal of building a quantum data center.

“Currently, open market quantum computing stocks are highly sought after, and they were all initially listed through SPAC,” Weedbrook said. “Therefore, we hope to share this enthusiasm for the market.” For example, the stock price of D-Wave Quantum (QBTS.US), headquartered in British Columbia, has risen about 230% since it went public in New York on August 8, 2022.

Currently, quantum computers are widely regarded as having the potential to break through the computing power limitations of classical computers. Since this year, the technology has moved from a theoretical exploration stage to a commercial application journey, drawing great attention from tech giants: IBM (IBM.US) and Microsoft (MSFT.US) have continued to increase investment, and Google (GOOGL.US) announced breakthrough algorithm progress last month. US financial giant J.P. Morgan Chase (JPM.US) also incorporated quantum computing into its $1.5 trillion technology investment strategy in October.

Xanadu was founded in 2016 and is headquartered in Toronto. It is unique in developing quantum computers driven by light particles, which is different from the path of using superconducting circuits or ion trapping technology. The company's systems operate at room temperature without relying on expensive cryogenic cooling systems like many other quantum computing platforms.

Xanadu's customers are mainly focused in the fields of pharmaceuticals, artificial intelligence (AI), and materials development. However, Weedbrook anticipates that with the wider application of quantum computing, the customer base will continue to expand.

According to the terms of the transaction, existing Xanadu shareholders and management will not receive cash benefits, and all of their holdings will be converted into shares in the new company. The deal has been approved by the boards of directors of both parties. After the transaction is completed, the shares of the new company will be traded simultaneously on NASDAQ and the Toronto Stock Exchange.

Xanadu also stressed that after the merger, it will become the first and only listed company in the field of pure photonic quantum computing.