A quantum computing start-up established by two PhD graduates from the University of Oxford has reached an agreement for its acquisition by a larger American firm, resulting in an estimated paper wealth of around $370 million for the founders.

Founded in 2019 by Chris Ballance, 37, and Tom Harty, 38, Oxford Ionics emerged from Oxford University with the vision of developing revolutionary quantum computing technology.

In a noteworthy transaction, Ion Q, a competitor with a valuation of approximately $10 billion listed on the New York stock exchange, announced the acquisition of Oxford Ionics on Monday in a predominantly share-based deal, placing the value of the UK start-up at nearly $1.1 billion.

Both Ballance, the CEO, and Harty, the CTO, have retained a stake of 16.71 percent each in the company, which brings their combined valuation to about $370 million, as revealed in corporate filings.

Initially established in a basement on Woodstock Road, Oxford Ionics was poised to secure its first office space when the Covid-19 pandemic occurred.

The firm has set world records in several critical aspects of quantum computing performance and last year delivered quantum computers to the UK’s National Quantum Computing Centre located in Harwell, Oxfordshire, as well as to Cyberagentur in Germany.

Utilizing quantum bits or qubits, quantum computers are capable of processing information significantly faster than traditional computers, though they currently face challenges related to error rates.

Oxford Ionics specializes in trapped ion qubit technology, promoting it as a method conducive to producing high-quality qubits that minimize errors, with reliability projected to improve with advancements in computational power.

This technology is anticipated to drive significant advancements in various fields, such as pharmaceuticals and drug discovery, with Oxford Ionics collaborating with AstraZeneca, the largest pharmaceutical firm in the UK, headquartered in Cambridge.

According to Boston Consulting Group, the quantum computing sector is forecasted to generate up to $850 billion in global economic impact by 2040.

The spin-out was facilitated by Oxford Science Enterprises, which boasts a portfolio of over 125 firms. Other stakeholders in Oxford Ionics include Oxford University, Braavos, Lansdowne Partners, and Prosus Ventures. The company secured around $36 million in a Series A funding round towards the end of 2022.

In light of the acquisition, Ballance addressed concerns regarding the potential decline in benefits for Oxford and the UK in terms of technological and economic development, asserting, “We’re doubling down on Oxford, building it out, and we’re just doing it a hell of a lot faster than we’d ever planned.”

After the merger, both Ballance and Harty are expected to continue their roles at Ion Q and will work to expand their team based in Oxford.

Oxford Ionics has taken up a 30,000 square foot headquarters at a newly established science park in North Oxford and has also opened an office in Colorado.

Ballance has known Niccolo de Masi, the CEO of Ion Q, for several years; De Masi, who studied at Cambridge, regards himself as an honorary Brit.

De Masi expressed his ambition to create “the Nvidia of quantum,” referencing the prominent American chip manufacturer, and aims to develop a company valued at $1 trillion.

He stated, “In the last decade, major tech companies have rapidly expanded, often more quickly than anticipated. From our viewpoint, we are just beginning this journey. A modest $10 billion market cap could scale to $100 billion or even a trillion in the future. The majority of our growth still lies ahead.”

The newly formed entity plans to uphold current customer connections, including partnerships with government agencies in both the UK and the US.

De Masi remarked, “This merger between the US and UK will be of significant interest to our governments, particularly as we strive to contend with China’s substantial investments in quantum computing. A cooperative effort between the US and UK governments is crucial in addressing this competition.”