UK-based encryption technology developer Arqit agreed on Wednesday to a reverse merger with special purpose acquisition company Centricus Acquisition Corp that will be backed by corporates Sumitomo and Virgin Orbit.
The deal will create a new company called Arqit Quantum, which will be valued at $1.4bn and which will take on the listing Nasdaq Capital Market Centricus Acquisition got in a $300m initial public offering in February 2021.
The merged business will receive approximately $70m from a private investment in public equity (PIPE) deal featuring satellite launch services provider Virgin Orbit – which is contributing $5m – diversified conglomerate Sumitomo Corporation and investment holding company Heritage Group.
Founded in 2017, Arqit has developed a software platform which uses cloud-based quantum encryption technology to secure digital communication across any device. It has operated in stealth mode until this week.
The proceeds from the deal will be used to commercialise the company’s products and support the launch of two satellites that will assist its operations. Virgin Orbit has been selected to facilitate the launches, which are expected to take place by 2023.
Arqit CEO David Williams said: “The capital from this transaction will enable us to develop critical relationships with existing and new customers and fully scale our platform as a service with a balance sheet which gives us speed, momentum and the resilience to deliver on our commitments to customers for the long term.”
The company has not disclosed details of its funding but Mark Boggett, CEO of venture capital firm Seraphim Capital, told Space News it had taken part in a 2018 seed round and each subsequent round until it invested an undisclosed amount in Arqit last month.
VC firm Notion Capital revealed this week it had provided pre-seed funding for Arqit in 2018 before returning for rounds in June 2019 and September 2020, and said it is the company’s largest investor. Evolution Equity and the UK Future Fund are also among its backers.