Eliminating the looming threat posed by quantum computers to the world’s data is the business of ISARA Corp., which recently announced a US$10-million Series A financing round led by Silicon Valley-based Shasta Ventures.

ISARA launched in 2015 with a US$11.5-million investment from Waterloo’s Quantum Valley Investments, led by BlackBerry co-founder Mike Lazaridis. The rationale for ISARA was that quantum computers will be exponentially more powerful than conventional computers and, therefore, capable of defeating the existing cryptography that safeguards things like online purchases or data stored by government and businesses. Preventing those kinds of breaches is ISARA’s core business.

ISARA, which now has 40 employees, is co-located with QVI on Westmount Road North.

We recently caught up with ISARA CEO Scott Totzke for an update on the state of quantum computing, the threat posed by quantum, and how the recent Series A will drive growth at his company.

Q – Scott, congratulations on your Series A. Perhaps to begin, can you tell us how the raise with Shasta unfolded?

A – [Raises] are lengthy processes, right? I’d been talking with venture capital firms probably for a year, somewhere between 80 to 100 of them.

I was looking for the right fit. It’s not just about capital, but rather who buys into the vision for what we’re doing. Capital is important, but who sees the longer-term path we’re trying to carve here, in terms of moving to quantum-safe technology across this broad portfolio?

Shasta is a really good example of a top-tier venture capital firm, right in the heart of Silicon Valley. It has a long-term view from an investment standpoint. It has a great network in terms of the connectivity they have within Silicon Valley, but also, the partners there have 20-plus-year relationships with senior technology decision makers at various OEMs (original equipment manufacturers) that we want to engage with to help advance our business.

It’s really good to validate what we’re doing through the eyes of a company that looks at hundreds, if not thousands, of firms a year to decide where to invest. Finding a good fit for us was fantastic.

Q – And how will the money help ISARA?

A – For our first 3 ½ years we’ve been working on foundational technology – build the cryptographic systems required to license to different vendors, whether you’re an automotive OEM or you’re a traditional technology vendor.

This new investment lets us be much more aggressive on the front-end of the business. We have a lot of global opportunities to pursue. Getting a presence in Europe is the first thing we want to [achieve]. We’ve got a small [presence] in California. We’ll probably put more resources in [Washington] D.C., as we see the U.S. government market being a very critical piece for us in the next couple of years.

There’s a bit [for] R&D funding, but the bulk is really looking at expanding sales and business development and marketing opportunities.

Q – For most people, quantum is a bit of a black box, difficult, perhaps, for them to get their heads around and to fully understand the threat that quantum computing poses to traditional data encryption. As quantum computing gains traction, as it becomes more of the day-to-day, will it become something that we all will eventually understand and grow comfortable with?

A – It’s an interesting discussion. We started out with this idea that there’s no PhD required to work with our software tool kit. One of the early realizations we had – because, what is quantum? What does it mean to me? – was that when you talk with most people they don’t understand how the processor in their phone works or even how the computer on their desk works. So there’s a lot of complexity that we as consumers of technology or even as professionals in the technology world don’t really understand or really grasp.

And then this new thing quantum comes along, which is revolutionary, and changes the dynamics of how we look at certain hard problems and everybody wants to know: How is that different?

When you don’t have a baseline of understanding of how your current computer works, moving to understanding what a quantum computer does is a bit of a leap.

The best way to look at it, perhaps, is that there are certain types of problems that quantum computing will solve much more efficiently than classical computers today. So what we can get [with quantum computing] is optimization of problems, where we can get to the end result in fewer steps. If I can do something in fewer steps, it’s going to be faster, and sometimes that’s exponentially fewer steps, in the case of attacking the complex math behind today’s cryptography.

There are going to be cases where classical computers will outperform quantum computers because the optimizations available through quantum just aren’t going to yield any real benefit.

If you really want to simplify it, you can think of it like a graphics co-processor in your computer. We’ve created purpose-built chips that handle complex graphics for computers and video game systems and these GPUs are very powerful in their own right. A quantum processor will be able to take certain tasks and handle them in a optimal way.

Q – How far away is the everyday use of quantum computers?  Are we nearer than, say, two years ago?

A – We already do a lot of things [with] quantum. Using an MRI [machine] is using quantum technology. We have quantum sensors that are being used in oil and gas exploration. Compasses and location services are starting to look at quantum, time and navigation-type things. So we’re seeing some of the early stuff.

But for the average consumer, it’ll just be something that gets processed on the back end in a cloud service. Again, like that complexity of your desktop computer, and the complexity of today’s existing cloud services, we probably won’t fully appreciate [how they work]. So we’ll never know, for the most part. As a consumer, you’ll just find that now you have a service available to you that was previously unavailable or operates much more efficiently than it did in the past.

Today, if you’re a hobbyist or a developer, you can use quantum computers through IBM or Microsoft by using cloud services, to do some of that early experimentation. Efforts of Microsoft to democratize access to quantum computing resources will pay off from a development standpoint.

Q – Does the black box nature of the technology pose a problem from the standpoint of making a sale? Or do your customers all get it?

A – The biggest thing is the timeline, and when we would see quantum computers that would be a cryptographic threat. That is kind of the black box.

We’ve seen IBM recently say five years – that if you don’t have quantum-safe crypto and you’re still using today’s state-of-the art public key cryptography, then in five years you won’t be able to protect your information. That’s pretty aggressive.

At the other end of the scale, we have the U.S. government saying its 20 to 30 years away.

When we look at the industry and coalesce the data, 2026 seems like a reasonable date. So somewhere between five and 12 years we’re going to see a large-scale quantum computer that is a cryptographic threat.

That creates a lot of problems for everyday consumers, for large enterprises and for government because we’ve taken public key cryptography and we’ve embedded it in absolutely everything.

Now we have to go through a wholesale replacement. That’s where the timeline becomes either an incentive or an impediment, depending how you look at it.

We talk to automotive manufacturers a lot and the interesting thing about them is we don’t tend to traditionally think of them as a high-tech, bleeding-edge play. But they are very quickly moving in that direction.

The next-generation automotive platform is really all about having an IP network, connectivity, and a lot of financial incentive to do over-the-air software updates, not just for the in-car entertainment systems but for the entire automotive platform.

When you go back to looking at the time frame for an automotive manufacturer, it’s 2018 and they’re finalizing the 2024-2025 model years. That car is going to be on the road for, arguably, 13 to 15 years, and if they want to realize the benefits of more quickly and cost-effectively updating software on the car, and do that through an over-the-air software update, they really need to be thinking in 2018 in order to deliver a quantum-safe vehicle in 2025 – that, or they’re going to have to do a massive recall.

So, that industry, because of the long lead time and long lifecycle of the product, is already starting to grapple with [quantum] problems.

If you’re talking about enterprise IT, the time it takes to migrate a large identity and access management system like the one a bank might have is something in the neighbourhood of seven to 10 years.

So if you think about the financial services world and banking here in Canada, migrating a large multinational bank to a point where they can start issuing you a quantum-safe Visa card or quantum-safe debit card, the work that leads up to that is somewhere in the range of seven to 10 years.

If we don’t start now, putting that foundational work in, so that in 2025 or 2024 you can get a quantum-safe debit card, then we end up getting to a point where we’re really starting to introduce a lot of risk. And that can be taken to digital transactions.

So, tons of different areas that have to be looked at which is creating a lot of opportunity for ISARA to create partnerships with leaders in various areas of these ecosystems and start doing the early proof-of-concept work now.

At the end of this migration, we may never know it happened, providing everybody did their job right.

Q – So smart companies see it coming ...

A – Absolutely. It comes back to that timeline. When do we see the threat happening? How many generations of technology do we have to go through before we can make those changes?

But I would say that in the 3 ½ to four years that ISARA has been around, the dialogue has changed dramatically. Four years ago, this discussion would have been that quantum is 20 years away or will never happen, and now we’ve got IBM saying five years.

So, we definitely see the industry starting to accelerate and we see a lot of acknowledgement that the timeline is not going to be extended in terms of when the threats are going to manifest.

The discussion is no longer about the basic science problem of can we build a quantum computer or can we make qubits talk to each other and solve some sort of useful problem. Those areas of research and basic science have been addressed. Now we’re looking at scaling problems. How do you do this on a bigger scale?

Q – Mike Lazaridis has made an enormous investment in quantum in this region, including in your company. Does this region have a leg up on what’s unfolding around the world with quantum? Or is it an all-out arms race?

A – It’s very much becoming an arms race – very much so.

This region has about $1.6 billion invested in quantum information science over the last 20 years – that’s everything from quantum computing to quantum sensors to quantum crypto. That’s a substantial investment in a small, compact region. We have a good advantage in terms of that.

We have close proximity of our resources. It’s only a couple kilometres between Perimeter Institute and IQC (the Institute for Quantum Computing at the University of Waterloo) and Quantum Valley Investments. It’s a really unique ecosystem. And IQC is very unique in that it’s a multi-disciplinary institute where we’ve got math and engineering and material science and computer science and physicists all working together under one umbrella,  which is bringing all the talent we need together in one spot.

But investments are certainly heating up around the world. The U.K. government and Europe are making investments. The Chinese government recently put $25 billion together between Alibaba and the government to build a quantum information research centre. So there’s a lot of acceleration going on.

But we’ve also seen this region being referred to as a model for what some of our partners need to do in the U.S.

We had a conference about a month ago where Waterloo’s Quantum Valley was the feature of a day-long session at the Hudson Institute, which is really showing a cohesive Canadian strategy, whereas the U.S. government currently doesn’t have one.

We do see Canada showing a lot of leadership in many areas of technology, showing we can solve problems that are well ahead of where the rest of the world is right now.

Q – What keeps you up at night?

A – From our perspective, it’s really about how fast we can move as an industry and how quickly we can move within our government and infrastructure capacity.

Because we’re very concerned that our adversary, whoever it may be, is currently storing all the communications we send over public networks, archiving them in a data centre, and at some point in the next five, six, seven years, they’ll have a quantum computer and then they’ll be able to reveal all the secret communications that we’re sending today.

So I’m concerned that we still don’t see, from an industry standpoint, the type of urgency for some of this early adoption that would be required to ensure we can maintain the stability of the government or the stability of financial institutions. Because those would be the early targets for state-sponsored attacks.

I’m less concerned about my cell phone or your cell phone or my home router. I’m more concerned about those big, fundamental networks that are going to be essential to maintain harmony within a given country. If they fail, we have a lot of very significant problems to deal with.

– interview edited for brevity and clarity

ISARA Team

The team at ISARA Corp.