Xanadu Quantum Technologies Jumps 24% to US$10.8-Billion

xanadu quantum technologies closed up 24 per cent on Friday, pushing its market capitalization to US$10.8-billion. The stock move left early Canadian backers sitting on paper gains they cannot turn into cash yet.

Christian Weedbrook and late March

Christian Weedbrook said he tried to raise as much financing as possible in Canada when he founded Xanadu a decade ago. The company went public in late March by combining with a Nasdaq-listed special-purpose acquisition company, and the Friday jump made it Canada’s fifth most valuable public tech company.

That rise is not evenly usable. Early investors are subject to a lock-up and cannot sell until late September, so the headline value includes stakes that are still frozen.

OMERS, Real Ventures, and others

Ontario Municipal Employees Retirement System led Xanadu’s first two financings through its venture capital arm, and it invested less than US$30-million before its stake reached US$1.45-billion. OMERS chief executive Blake Hutcheson called the gain “wacky” and added, “I’m keeping perspective. It’s on paper and it’s locked up, so I don’t want to get overly zealous. But it’s proof”.

Real Ventures put less than US$10-million into Xanadu, and its 2017 fund’s stake was worth US$668-million. Golden Ventures’ Fund II held US$493-million of Xanadu shares, Georgian’s Fund IV had US$1-billion of stock, and Radical Ventures’ second fund held US$430-million.

Locked-up Canadian investors

There were 33 locked-up Canadian investors in the company, including Bank of Montreal, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Polar Asset Management Partners, MM Asset Management, Business Development Bank of Canada, Michael Hyatt, Richard Hyatt, Michael Serbinis, Dennis Bennie, Anthony Lacavera, Daniel Debow, and Donald Guloien.

Hyatt said, “Xanadu’s success is a massive win for the Canadian ecosystem, proving we can scale world-class deep technology right here while delivering the kind of liquidity that fuels the next generation of founders,” and added, “While this is a great milestone for early backers, I’m convinced Xanadu is only just getting starte”. For now, the important date for those backers is late September, when the lock-up ends and the paper wealth becomes tradable.