Microsoft and Major Canadian Banks Invest $131 Million in Quantum Computing Startup Photonic

Photonic surpasses $1 billion valuation after funding round led by RBC and Telus with strategic partnership from Microsoft

Vancouver, Canada – January 6, 2026

Photonic Inc., a startup specializing in quantum computing, has successfully raised 180 million Canadian dollars (131 million U.S. dollars) in a new funding round, after attracting two heavyweight new investors - Royal Bank of Canada (RBC), the country’s largest bank and most valuable company, and telecom giant Telus Corp. They joined top-tier existing investors led by Microsoft, according to Bloomberg.

Paul Terry, CEO of Vancouver-based Photonic, confirmed in an interview with Bloomberg that the company’s valuation now “significantly” exceeds one billion dollars, while declining to provide more precise details. With this round, the company’s total funding since its founding rises to 375 million Canadian dollars.

The round was led by Planet First Partners and represents a vote of confidence in Photonic’s efforts to develop what it calls “distributed quantum computing” to a level where it can be delivered to customers at scale, explained company founder Stephanie Simmons. Microsoft had earlier formed a partnership with Photonic to develop quantum networks when it became an investor in 2023.

A quantum-computing revolution and an investment race

Quantum-computing technologies promise to solve complex problems at speeds exponentially faster than classical computers - an achievement that could accelerate scientific progress while also threatening to disrupt encryption systems that currently secure the global economy. These enormous possibilities are drawing billions of dollars in investments from governments and corporations, including major financial institutions.

Terry revealed that Photonic will continue a “rolling close” to raise up to 250 million dollars in this funding round. He added that all existing investors - including the UK government’s National Security Strategic Investment Fund - participated.

This round represents RBC’s first direct equity investment in a quantum-computing company. “Photonic’s scalable quantum architecture has the potential to unlock critical applications in the financial sector, ranging from cybersecurity to portfolio optimization and risk modeling,” said Barry Laver, head of venture capital and private equity at RBC.

The Canada–U.S. quantum race

In December 2025, Canada’s government announced additional funding for domestic quantum companies as competition with the United States intensifies. In November, British Columbia Investment Management Corp - a Photonic shareholder managing 295 billion Canadian dollars in assets - announced it was boosting preparations for a world shaped by quantum computing.

Across the border, the U.S. Defense Advanced Research Projects Agency (DARPA) launched a competition for companies to build a “useful, fault-tolerant” quantum computer within a decade. Photonic was among 11 companies selected for the second phase of the initiative.

Photonic is one of several quantum-computing companies with Canadian roots. In November, Toronto-based Xanadu Quantum Technologies announced plans to go public via a SPAC merger, aiming to raise around 500 million dollars. Meanwhile, D-Wave Quantum Inc., which originated at the University of British Columbia, now has a market value of about 10.6 billion dollars after its share price surged more than 3,000% over the past two years.

Commercial expansion and future plans

Photonic generated early revenues in the low millions last year. Terry explained that “this round is dedicated to commercial deployment” - hiring more staff and rolling out Photonic’s technology to more companies. He did not rule out a future IPO.

“I wouldn’t say we’ll never go public, but there’s a right time and place,” he said. “If you remember, about a year - or 18 months - ago, nearly all the publicly listed quantum-computing companies were close to being delisted.”

This successful funding round comes at a time of growing interest from investors and governments in quantum computing, given its vast potential to transform industries ranging from cybersecurity and finance to pharmaceuticals and artificial intelligence. The strategic partnership with Microsoft - alongside a direct investment from Canada’s largest bank - reflects rising confidence in Photonic’s ability to turn quantum-computing theory into commercially viable solutions.