IonQ to acquire Capella Space for quantum network development push

IonQ, a quantum computing hardware and software company, has agreed to acquire Earth imagery satellite operator Capella Space to aid in ongoing work to create a quantum key distribution network in space.

Quantum key distribution is a method of securely sharing encryption keys using particles of light, called photons, to ensure communications remain private and tamper-proof. By leaning on the laws of quantum physics, system operators can ward off attempts to intercept or observe key changes in the photons and therefore see the intrusion.

With Capella in its fold, IonQ is also looking to expand its network of partnerships with other technology companies and U.S. government agencies including those in the intelligence community.

The transaction involving Capella is anticipated for closure in the second half of this year and is one of two purchases IonQ announced Wednesday, neither of which have disclosed terms.

IonQ also revealed its acquisition of Lightsynq Technologies, a startup credited with developing the world’s first functional quantum repeater system for extending the range of quantum communications.

Capella opened for business in 2016 and launched its first synthetic aperture radar satellite two years later. The company has raised $250 million in capital and launched 15 satellites since it started with six currently in-orbit.

Capella holds multiple classified contracts and has recorded approximately $10.3 million in unclassified prime revenue over the trailing 12 months, according to USASpending.gov data. The Air Force represents 98% of that spend with NASA being the other 2%.

IonQ is headquartered in College Park, Maryland, and started in 2015. The company holds quantum tech development contracts with agencies such as the Air Force Research Laboratory and Applied Research Laboratory for Intelligence and Security.

“By leveraging long-distance quantum repeaters from Lightsynq combined with Capella’s top-secret signals capabilities, IonQ expects to build global quantum-secure networks,” IonQ’s chief executive Niccolo de Masi said in a release.

As IonQ sees things, its envisioned network would enable both satellite-to-ground and satellite-to-satellite communications.

The Capella satellites and customer relationships are only part of the equation for IonQ, which is also looking to further enhance its artificial intelligence-augmented surveillance and reconnaissance stack offering for agencies.

Paul Weiss is acting as legal adviser to IonQ. Citi is working as exclusive financial adviser to Capella Space, whose legal adviser is Freshfields LLP.

Below is a CNBC interview with De Masi aired Thursday.