Quantonation’s double-sized second fund shows quantum still has believers; plus. Ali Partovi’s Neo looks to upend the accelerator model

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Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/tcstartups for 30% off a Framer Pro annual plan. That's framer.com/tcstartups. Rules and restrictions may apply. This probably won't come as a surprise, but quantum computing will not be replacing supercomputers in 2026. let alone reaching industrial scale. And yet, investor appetite for companies pursuing the elusive quantum advantage has not dwindled; it has increased. Quanto Nation Ventures, a venture firm investing in quantum and physics-based startups, has closed its oversubscribed second fund at €220 million, which works out to approximately $260 million. That's more than twice the size of its inaugural fund, and it comes in addition to other signals that the quantum winter is not coming yet. While some warned that too much quantum hype and not enough tangible outcomes would eventually cause funding to collapse, the opposite has actually happened. Take the prediction that quantum will eventually crack modern encryption. That moment has no clear timeline, and yet governments have joined Big Tech in the race. In the years since Quanto Nation's launch in 2018, the quantum technology sector has become less incipient, with both technological breakthroughs and early demand from academic and industrial labs. As a result, Quanto Nation partner Will Tsing told TechCrunch there has also been a shift in the types of investment opportunities that are available to its second fund. One example is what Tsing describes as the picks-and-shovels opportunity, with companies developing technology that support the quantum industry. He cited the example of Dutch startup Q-Blocks, a long-bootstrapped company that was selling quantum control hardware and software to Quanto Nation portfolio companies before the VC firm co-led its Series A. This growing ecosystem also explains why backers are doubling down on Quanto Nation and why other dedicated quantum funds, such as QDNL, And 55North have emerged. Zeng said, VCs recognize that this is not an easy area to invest in at the early stage. The technology is very specific and complex, the markets are often new, and the teams as well. So the firm's thesis is to invest early to capture more value. But a handful of quantum companies have already gone public, and their shares have surged in recent months. According to Bloomberg, this Quantum frenzy is partly stoked by Nvidia, whose CEO Jensen Huang declared back in June last year that quantum computing is reaching an inflection point. Despite the fact that quantum chips have yet to outperform classical computers outside of purpose-built benchmarks, consensus is growing that real-life applications are only a few years away— from life sciences to new materials. That's in part thanks to advancements in error correction— the ability to fix the mistakes that quantum systems are prone to. Google's Willow chip was a landmark for error correction back in 2024, but no architecture has won yet, and smaller players are still in the race. Xing noted that a surprising number of companies have entered DARPA's quantum benchmarking initiative. He also believes that beyond the public market excitement, there are more exciting technologies that are currently private. For Quanto Nation, those private opportunities span a wider canvas than quantum chips alone. Fund 2 has already invested in 12 startups, with a target portfolio of around 25, covering not just the software and industrial layers needed to make quantum advantage real but also adjacent physics-based technologies such as photonics and lasers. This expanded thesis is backed by investors old and new. According to the firm, major investors from its first vintage, such as Singapore's Vertex Holdings, have returned for the second fund, with new limited partners including the European investment fund Grupo ACS, Novo Holdings, Planet First Partners, and Toshiba. Quantum Nation's geographic scope is equally international, with dual headquarters in Paris and New York. The firm has backed French quantum companies such as Pascal and Quandela, but also placed bets in Asia and North America, and will continue doing so. Zeng said, in a lot of the areas we invest in, there's not yet a clear regional winner, and a lot of the research has come from universities in many places. For the most sought-after founders, the prestige of a top-tier accelerator is increasingly weighed against giving up a significant ownership stake in their company. Ali Partovi, the veteran investor and CEO of venture firm NEO, wants to offer the mentorship and community of one of the most elite accelerator programs without forcing the best up-and-coming tech leaders to hand over 7% or sometimes 10% of their company before they've even started. Partovi, who is known for his early investments in Facebook, Cursor, and Kalshi, has just introduced Neo Residency, a new competitively structured program that combines the firm's now 4-year-old accelerator with a track for current college students. Partovi told TechCrunch that the terms that NEO Residency offers are so founder-friendly as to be not even comparable to any other accelerator. For the cohort of 12 to 15 startups entering the program this summer, NEO will invest $750,000 via an uncapped SAFE— a contract that gives an investor future equity in exchange for money now— with no ceiling on the valuation used to calculate that stake. Unlike the fixed percentage deals typical of other accelerators, Nio won't receive its equity until the company's next formal funding round. And even then, the dilution is tied to valuation. If a startup raises its next round at a $15 million valuation, Nio's stake will be 5%. But if that valuation hits $100 million, the firm's ownership drops to just 0.75%. We take the risk upfront, says Partovi, so this is extremely favorable to startups. In comparison, Y Combinator typically takes a fixed 7% of the company for $125,000, with another $375,000 invested on an uncapped MFN, or Most Favored Nation, SAFE. a clause that ensures early investors get terms at least as good as those given to later ones. Meanwhile, Andreessen Horowitz's SpeedRun program typically invests $500,000 in exchange for 10% of the startup via a SAFE note and another $500,000 if the next round is raised within 18 months at whatever terms are agreed to by the other investors. Partovi said, We're offering a deal so great that it's appropriate even for founders who were not even considering any other accelerator. The lower equity cost is only part of Neo Residency's appeal. The founders will work for 3 months at Neo's offices in San Francisco's Jackson Square District, participate in a 2-week boot camp in the Oregon mountains, and be mentored by about 30 experienced operators. But the program's main draw is its prestige. Seed and Series A investors generally have great respect for founders handpicked by Partovi. Wesley Chan, co-founder and managing partner of FPV Ventures, said onstage at last year's TechCrunch Disrupt, the one accelerator I like right now that has very high signal and every founder I met there is just wicked smart is NEO. Startups that have gone through the program include Moment, a fintech company that has raised $56 million from investors like Andreessen Horowitz, and Anterior, a healthcare AI startup backed by NEA and Sequoia. The Neo Residency will also select 5 to 8 students, either as individuals or small teams, who will receive a $40,000 no-strings-attached grant to take a semester off to work on a project. While there is no requirement to drop out or start a formal company immediately, Partovi said he hopes the students will catch the entrepreneurial bug and, when they eventually launch a startup, turn to NEO for funding. NEO is keeping the program small and elite. It will cap its 2 annual cohorts at 20 teams each, consisting of a mix of active startups and student projects. Why is NEO offering such generous terms? Partovi said, we have more confidence in our ability to attract and pick out future superstars than ever before. His track record suggests that confidence is well-founded. He famously met Cursor co-founder Michael Truel while Truel was still an MIT student and later wrote one of the first checks into the AI coding startup, now valued at nearly $30 billion. That's it for now. For more stories like these, go to techcrunch.com.

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