Ashley Montanaro, CEO of Phasecraft on Quantum Advantage, Deep Tech, and the Future of Computing

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0:35Seapoint Treasury is a money market fund. Rate recorded at 1st of October 2026. Rates are variable and subject to change. Capital at risk. Hello and welcome back to another episode of Riding Unicorns. Today we're delighted to be joined by Ashley Montanaro, co-founder and CEO of Phasecraft, which is in the very interesting world of quantum computing and building algorithms for quantum computing. so we're really excited to get into that. Ashley welcome to the show we've had a couple of episodes with people in the quantum space but no one I think building in the sort of software for quantum part so it would be great to learn a little bit more about what you're actually doing with FaceCraft as a starter.

1:14Thanks James and it's fantastic to be here so yeah at FaceCraft we are working in quantum computing but we are working on the software and algorithm side of quantum computing So we're developing quantum algorithms and quantum software to run on quantum computers. And FaceCraft was actually founded seven or eight years ago now on the premise that this was really a key piece of the puzzle if you want to make quantum computing truly useful. Because quantum computers are amazing machines that use the principles of quantum mechanics to do things that you just can't do with any standard computer that's based only on the laws of classical physics.

1:52But if you want this machine to do something useful and interesting, you need to write a special kind of algorithm for that machine, which is called a quantum algorithm. And it's not so easy to do that because quantum computers operate on very different principles. They use things like quantum superposition, quantum entanglement to achieve their great results. And so it's a challenge to develop these algorithms. and we founded FaceCraft because we felt that this was really going to be essential to enable quantum computing to tackle genuinely practically relevant problems such as developing new materials or understanding the behavior of drugs or even solving hard optimization problems and that's what we've been doing ever since we've been developing the software and the algorithms and actually also running those algorithms on some of the world's best quantum hardware.

2:43Do you have different coding languages or what are the challenges that mean that it's not as simple as just transferring current algorithms for the web as we know it to the quantum space? So if you were to look at a program written for a quantum computer, it wouldn't look that different to a program written for a standard computer. You're still looking at a bunch of instructions, maybe even some Python code. But the key thing that's different is that the instructions in that code are doing different things. They're doing things which quantum mechanics has as native operations, which standard physics can't do.

3:21So in particular, you can use features like quantum superposition, which is basically an object being able to be in two states at the same time, effectively, or even a number of objects being in exponentially many different states at the same time. And even more perhaps bizarre features like quantum entanglement in order to get to solutions that you could not do using standard computing. One example of this is modeling physical systems. So if you want to model a system where strong quantum correlations are important at a very fine-grained, very accurate level, right down at the atomistic scale, then it turns out that often you need to really understand the quantum mechanics in that system to do that accurately.

4:06And this turns out to be exponentially costly for a standard computer. Standard computers can't represent these quantum correlations natively, but quantum computers can. And that means that they can get exponential speed ups over standard computers for problems that are things like modelling the voltage in a battery cathode over time or other properties of genuine real world physics. Often when there's a new sort of technological breakthrough, there's this kind of split between hardware and software. You need the hardware to get to the point where you can actually host and run the software. But then a lot of the value is created in that software layer as the hardware sort of becomes a commodity of that new technological revolution.

4:49Is that the big bet that you're making with PhaseCraft? So we think that quantum computing is going to be an incredibly transformative technology, but we think that the software layer is actually at least as important as the hardware. So the hardware is absolutely essential because this is a very special technology and you can't reproduce what quantum computers can do with a standard computer. So it's essential that the hardware works and is high performance. But on the other hand, we feel that just like in the history of classical computing, that there's a really crucial role played by the software elements of that stack.

5:28So if you look back to the 1950s, 1960s, 1970s in standard computing, then actually back then computing hardware was pretty limited, but it was still possible for those computers to do amazing things like even send people to the moon because the software that was written for those computing platforms was incredibly efficient, incredibly highly optimized. you had some very smart mathematicians thinking very hard about it and that analogy holds true for quantum computing as well that if you want to get these machines to do something useful then the advantages that you can get from making the software better tend to far outstrip the advantages that you get from making the hardware a bit better.

6:10Ashley we have so many questions but obviously you're an episode one portfolio company we're delighted to be investors in you guys since the seed round a few years back. And building in a space like quantum is just, it's so different to building in software, in traditional software or in sort of traditional AI as we sort of know it, because you don't have really the opportunity to go scale your revenues to a thousand customers like over the next 12 months. Can you tell us a bit more about how you think about building in such a space and where it's not about revenue momentum, it's perhaps more about talent acquisition and other things like that.

6:49So quantum computing is almost the archetypal example of a real deep tech kind of situation in that this is something which is going to be incredibly important, but it has taken time to develop. And I think that obviously feeds into the way that you build a company in this space. And for us as building FaceCraft, it's been about being very deliberate in how we think about that. So we believe that after many years of development, that the entire field is now on the cusp of what people call practical quantum advantage, which is the point where quantum computing does genuinely better than standard computing for a problem that people really care about for practical or commercial reasons.

7:33So not just a problem that's designed to make the quantum computer look good and the classical computer look bad, but something that people really care about for other reasons. And this is going to be incredibly exciting. And I think it's a real commercial inflection point for the entire field and for companies like ours, but it's taken some time to get there. And so I think this feeds into things like making sure that you build a company sort of sensibly. So you don't suddenly hire a hundred salespeople in year one, because actually there aren't, you know, a thousand people to sell to at that point sensibly.

8:06You spend time thinking about the R &D and spend a lot of your effort on that early on, building up the technology so that you can then exploit it. And you also take advantage of all of the opportunities that are available in terms of non-diluting funding from grants and from government contracts more recently as well, which for quantum has always been like a really significant factor in the last few years. Can you tell us a bit more about the non-dilutive funding? because it doesn't come up very much at all on this podcast. In 250 episodes, we've barely touched on it. And I know that you guys have done so well in that.

8:40And it is great that there's a lot of that sort of funding available. But if you could kind of enlighten the audience and us around how much you've raised in non-dilutive and how that's been directed. So over the years, it's been of the order of£5 million in non-diluting funding that we've raised, which was very significant for us in the early days as a company and as time goes by this is going to be decreasing and replaced more and more with contracts of various kinds but in the early days this was very important and there's a number of different mechanisms that this has come through a lot of this has been through UK efforts such as Innovate UK so this is a funding body which funds in industrial research.

9:26And one of the key things that they try to enable with this funding is collaboration between different organisations. So, for example, these mechanisms enable us to work with some end users in the early stages of spacecraft development, such as Johnson Matthew, which is a big UK chemicals company, and others on projects which are of mutual interest, but which maybe at that time, you know, seemed a little bit speculative, a little bit far off for a large corporate customer to fund entirely from their internal resources. So these sorts of opportunities, they tend not to be ones that cover, let's say, all of the costs of what you're doing, but they can very significantly defray your costs and they can push out your runway a lot.

10:14And they also provide some level of validation, I think, again, in the early stages of your company that you've won in a competitive process and you're working with some really good people. So that's one example. There are also things, opportunities from specific funders. So for example, we've recently finished a really big project funded by the Wellcome Trust through their Wellcome Leap program, one called Q4Bio, which was looking at breakthrough applications of quantum computing in human health. And that, again, was a fairly substantial opportunity that enabled us to work with some academic and industrial collaborators, which might not have been so easy otherwise.

10:52So essentially, I think these opportunities, if available to you in your particular area, can be really valuable signals and can also be really helpful for your runway. Yeah, absolutely. There's lots of different ways to fund a business and venture is just one of them. And so you mentioned quantum advantage, which is this idea that the quantum computing can outperform classical computers on genuinely useful tasks. What would be the proof point? You know, AI had chat GPT as this kind of like moment where it became normalized to use AI. And obviously, the industry has kind of exploded since that moment.

11:31What would be a sort of similar event or proof point that quantum computing is here and here to stay? I think it will look something like we have done a calculation which is giving different answers for the quantum computer compared with what you would get with a standard computer. Or maybe, you know, even the standard computer just not able to do that calculation. And this has been sort of validated by other methods, like maybe actually doing the experiment in the lab to build the thing that you just modeled is one example. and that this has been something useful, which people genuinely care about.

12:09And that one's a sort of a tricky one to make quantitative, I'd say. But basically, there will come a point before too long where we see end users wanting to use quantum computing to solve their problems, not because it's cool or because it's got quantum in its title, but because it's actually just a better solution for them. And I think some of this may happen kind of quietly behind the scenes, But I think there will also be some sort of big results that will come out where it's clear, OK, this is a new battery cathode that was discovered using a quantum computer. Or we've figured out that this solar cell material is much better than people thought or one of these things.

12:49And I think that's really going to be the chat GPT moment for the field. I cannot wait to see what sort of revolution that brings about because we've all been amazed at the impact of AI. And there are just more of these kinds of revolutions to come. And, you know, I think quantum is one of them. Fusion is definitely another that are sort of raising a lot of money today. But I know you guys have a bit of a focus on like material science, chemistry, energy systems, that kind of thing. Can you tell us why those are the areas that make sense to focus on now? And also you fast forward sort of 20 years, like why those areas are so exciting.

13:27it's a combination of two things it's because they're really good fits to quantum computing and they're really tough to solve using standard computing methods and also they're really commercially interesting and practically and scientifically interesting so if you look at a material it has a beautiful sort of regular kind of crystalline structure in general which turns out to map very nicely, if you go through some mathematical steps, to the way that near-term quantum computers look. And it turns out that quantum computing is just then a really natural fit to modelling these material systems on that quantum hardware.

14:11You have to come up with some sort of mapping between the electrons and the qubits and so on. So there's some work to do. But it turns out putting a material on a quantum computer is not that hard, relatively speaking. but on the other hand it's incredibly hard for standard computing methods so it's a really nice combination there I would say and I think if we fast forward of the order of 10 years or even 20 years from now I think that's the point where we will have seen some of these new materials or maybe new compounds new catalysts maybe even new drugs that have been discovered using quantum computing actually out there in people's hands and making a real difference I mean I think at that point, it's not too much to ask that we may have some real scientific breakthroughs that have been enabled through quantum computing and things even that we can't imagine today because we haven't been able to start these initial calculations and experiments.

15:04But I think that's enough time that we will really see the impact on our everyday lives. I think it's amazing to think. I mean, you know, obviously at the moment, AI is getting all the headlines and because it's, you know, the practical use cases that are blowing people's minds today. But I think it's quite possible that quantum will be the thing that extends billions of lives, allows us to live to 150 years old, all healthy years, solve some of the big health problems. And then, you know, with fusion and potential sort of limitless low cost energy. I mean, our lifetimes, potentially, there'll be a huge amount of change, like more than there's ever been in any sort of generation before.

15:42Yeah, I think I broadly agree with that. I mean, maybe I can't endorse the 150 years, but everything else I think I'm pretty happy with. One interesting point that comes up with what you just said is that, in fact, there's a really nice synergy between quantum computing and AI in the sense that people try to use AI for materials discovery and chemicals discovery. And there's been some really impressive results in this area, but sometimes it doesn't work. And the reason is basically that it's ultimately trained on data, which is produced using computational modelling, which comes from classical methods, which are sometimes really inaccurate.

16:17So what quantum computing can do is produce better training data to go into these AI models in order to turbocharge and make much more accurate that aspect of materials discovery as well. So I think these two are going to work really well together and be a self-reinforcing loop. And one of the other areas that does grab headlines is the security implications and whether we're all going to be hacked instead of the moment that we go post-quantum. What do you see that and how involved are you guys in that? Yeah, so as maybe your listeners know, quantum computing, one of the earliest results in quantum computing was that there are efficient quantum algorithms for breaking some crypto systems, in particular the RSA crypto system and elliptic curve crypto as well.

17:01And there's been a lot of recent interest in this and there's been improvements to the quantum algorithms and the error correcting codes that they use in order to knock down the cost of these algorithms, which has sort of brought forward some people's estimates of when quantum computing will be able to hack Bitcoin. And I think this is something that people really should be thinking about and they should have been thinking about for some time, actually. I think it's something that is not necessarily sufficiently priced into the thoughts that people have about cryptocurrencies and Bitcoin in particular, I mean, a fraction of all of the Bitcoin in the world and a pretty large fraction is vulnerable to just being stolen when someone has a large enough quantum computer and powerful enough quantum computer.

17:45And the date that this happens might be as early as 2029 or 2030, that sort of timescale. So I think this is something that is really important to be aware of. Obviously, the good news is that for some years now, people have been working on called post-quantum crypto systems, which are designed to be secure against quantum attack. So there's a lot of internet traffic and so on, which is already sort of secured against these quantum attacks we'll start seeing in a few years time. But I think this is a process that really needs to accelerate and people need to appreciate that before too long, this is going to be a real thing.

18:20The quantum computers are being developed by largely reputable regulated companies with huge funding and in the public eye, rather than bad actors so far. Do you think there'll be a sort of project glass wing style period while companies are able to secure themselves against quantum? I think it will be very interesting in a couple of years time to see the dynamic in terms of what is public and what is not public in terms of what some of these companies are able to do. I mean, one point I think that's interesting is that it's easy to get the impression that there are only two or three companies in the world that can do quantum computing that have large scale quantum computers.

19:02And this may have been true some years ago, but now actually there are many companies with very impressive quantum hardware platforms. Most of these have not got to the point of outperforming standard classical computing yet, but you can see that many of them are on a very clear trajectory to do that within the next few years. So I think to some extent that the genie is out of the bottle. And I think there are so many different technology platforms, so many different actors in this space, that I think it isn't really something that can be kind of kept behind closed doors for too long. We've obviously talked a little bit about the timeline and when things will happen.

19:38How are you thinking about capturing the commercial success of this? One great thing about the quantum algorithms that we're developing is that they are not super specific to one particular target application. You don't have to think, OK, I'm going to be the battery cathode quantum software company and spend five years developing algorithms of battery cathodes. It does help to have a specific application in mind and focus on that very closely. but I think the key ideas that are being developed they actually extend far beyond one particular vertical to a number of different areas and then thinking about how this looks to sort of capture some of this value within one or more of these verticals I think at a very high level we think it is a great place to be to be ones that have a capability to do things which is just not possible using other technology, using other platforms, using other algorithms on quantum computers, or even using classical algorithms.

20:39The way that's sort of realized in practice could look like us working very closely with a user to get to solutions of some problem that they really care about. And then the way that that looks may look something like they have some problem that they would like to solve and we solve it for them, or it could look like we provide them some technology and then we support them very closely in using that technology to solve that problem. And there's all sorts of other permutations as well. But I think the key thing for us is that we think that the most exciting place to be within that quantum computing stack is actually as close as possible to those applications, because that's where the real value actually lies for the customer.

21:21So that's really what we're trying to enable. Actually, we've talked a lot about quantum as a field and also phasecraft what you're doing but tell us a little bit about the founder journey what's it been like what are some of the things you've learned and what would be one thing that you wish you'd known when you started that you you kind of know now so phasecraft was founded by me and my co-founders toby cubit and john morton about depending on how you count it seven or eight years ago now and really the genesis of the company was that we felt that now that quantum computing is sort of really leaving the lab and becoming a genuinely practically important technology, that it was crucial to solve the missing piece of making the algorithms and software as efficient as possible.

22:08And all of us were academics working on different aspects of quantum computing. And we felt that our different expertise would help us with doing that. We'd use all of the skills that we developed over many years in order to make breakthroughs in algorithm development. So it was sort of interesting at the start, because really, this was a bet, like we bet that there would be some low hanging or even slightly higher hanging fruit that we'd be able to pick. And we'll be able to actually really improve some of the algorithms that were already known, where we would be able to address new problems that people hadn't even thought of before.

22:40And it turned out that that was the case over some years, we did a lot of work on, for example, modelling material systems and getting the cost of that down by factors of millions or tens of millions compared with the best previous algorithms. We also looked at hard optimization problems and came up with new ideas to speed up the solution to those as well. I think that one thing that I really did not expect back then, and it would have been probably nice to know, was quite how fast the field as a whole would grow and how much sort of interest, excitement, enthusiasm there would be over time. I think when we started the company, we always knew it would be kind of a slow burn compared with other startup areas perhaps because the technology is just so so hard but we didn't anticipate I think that during this you know sort of slow burn period that there would be such a huge level of excitement and enthusiasm and so much we are being pumped into the field and so many different quantum hardware platforms starting.

23:41Yeah Ashley thank you so much for taking us through all of that I mean quantum is this kind of next frontier that I think people are aware of, but sort of still feels quite far away because we're still getting our heads around AI. But it's a very exciting space. And it's definitely helped us and our audience learn a bit more about what's coming. We're going to move on to our final two questions. So the first is a future unicorn prediction. So if you could predict another company that you thought could go all the way, who would they be? So this one, I'm afraid I'm going to be totally useless to you because I think I can't make such a prediction.

24:17I think even thinking about the quantum space specifically, I mean, just the other day I met founders from probably about a dozen different quantum startups who are in the early stage and there's a huge number of them. And I think it's just incredibly difficult to pick actually. Okay. Can I press you on a, maybe a theme or a thesis that you've got that you think might play out successfully? I guess I would say radically different architectures for compute, I think, is generally interesting. And I think that could be quantum computing, or it could be something after quantum computing, even. And I think as well, the way to find people who are doing this kind of thing is basically to look at the areas in academia, which have suddenly got very exciting.

25:08And there's a lot of people piling into them and there's clusters developing. And in fact, often these things look very uncommercial, right? Like there's not necessarily any sign any of these people are wanting to start a company or anything like that. But within five years, some of them will be starting companies and these companies will be the unicorns in that space. So I think that's the only thing I can offer for predicting this. And our final question, actually, you could have dinner with any three people who would debut? So I'm going to pick three people who are probably real. And the first of these is someone kind of from fairly recent history.

25:47is John von Neumann, simply because he is absolutely amazing character who was one of the founders of the fields of computer science and quantum physics, which is kind of amazing that anyone can do this. And that his work has become directly relevant to my field, which brings these two things together. And also, apparently, he was an amazing dinner party guest, and it was a lot of fun to talk to. Next one I'm going to pick is Homer for the Greek poet, because I would like to know whether he actually existed or not. And I think, you know, if he shows up to dinner, then that means that he existed, which I think is nice.

26:23As a third guest, I would pick someone who was one of the earliest modern humans. I'm going to pick one of the earliest ones that had a spoken language because I just think it would be super interesting to talk to someone whose mode of thought is probably totally different to us. Amazing answers. So thank you so much. It's been really great to learn more about FaceCraft and your journey. And hopefully we are not too far away from quantum advantage because it sounds like another wave that's going to just change humanity and the world, hopefully for the better. But time will tell. But it's definitely going to be interesting for our industry and exciting.

27:05I think it's a wave that's coming and I think it is a wave that's going to be really positive for humanity. Brilliant. Thank you very much. having on the show. Thank you. That's it for this week. Thanks very much for listening. To stay up to date with the latest episodes, please follow or subscribe on your favorite podcast platform. We also have a newsletter called Reading Unicorns, which is another great way to get every episode direct to your inbox. Please tell your friends about it and we'll see you on the next episode. This episode is sponsored by Seapoint, the business account built for startups.