Arqit Limited (“Arqit”) and Centricus Acquisition Corp. (Nasdaq: CENH, CENHW, CENHU) (“Centricus”) have entered into a definitive agreement that would result in Arqit becoming a publicly listed company. Upon closing of the transaction, a newly formed Cayman holding company, Arqit Quantum Inc., will merge with Centricus, acquire Arqit and register its shares for listing on the Nasdaq Stock Market.
Arqit has pioneered a unique quantum encryption technology, QuantumCloud™, which makes the communications links of any networked device secure against current and future forms of hacking — even an attack from a quantum computer. Currently “public key infrastructure” or “PKI” is used to encrypt most of the world’s communications; however, PKI was designed in the 1980s and is no longer fit for purpose in a hyperconnected world. Furthermore, within this decade, quantum computers will likely be able to break PKI’s encryption algorithms.
Symmetric encryption is a well understood encryption technology that is known to be more secure than PKI, including against quantum attack. However, to date there has been no secure way to distribute symmetric encryption keys at scale. Arqit has invented a way to create those keys at end points when they are needed, at scale, securely, at any kind of end point device and in groups of any size.
QuantumCloud is symmetric encryption, reborn for the cloud, puts a small software agent at any end point device. This software creates an unlimited number of symmetric keys with partner devices. The process is very simple and fast. Currently Arqit’s system uses source keys which are originated in data centers; however, by 2023, the company plans to launch two quantum satellites to assume that role. Those satellites will use a transformational new quantum protocol invented by Arqit which solve all of the known problems of satellite quantum key distribution.
The satellites will create a backbone of secure keys within data centers all over the world and a quantum safe boundary protecting those data centers. A customer/user can create an infinite number of symmetric key pairs, in groups as large as are needed. Keys are never “delivered,” so they cannot be intercepted. They are created at the end points and therefore can never be known by third parties. They can be used only once if necessary and replaced frequently.
The service is sold and fulfilled on a self-service basis in the cloud making it an easily scalable business model. Arqit believes its solution will provide a transformation in cyber security that provides a simple and elegant migration from existing encryption technology and will also protect against quantum attack. Arqit’s current customers include the UK Government, the European Space Agency, BT plc, and Sumitomo Corporation.
In addition, many companies such as Verizon, BP, Northrop Grumman and Iridium are currently testing the use of Arqit’s technologies in different use cases. It is estimated that the global addressable market for information security and risk management will be approximately $194 billion by the end of 2024, as government, military, cybersecurity, telecoms and financial services players move at speed to protect themselves and their customers from critical security breaches.
Manfredi Lefebvre d’Ovidio, Chairman of both Centricus and Heritage Group, which was the anchor investor in the PIPE transaction, said, “Arqit is a unique company, with disruptive deep technology that will ensure a safer environment for businesses and people. David and his team have built an extraordinary enterprise and we are delighted to support Arqit’s development. Garth and the Centricus Acquisition Corp. team have done a remarkable job and we are extraordinarily pleased to be able to announce our partnership. I and my colleague Carlo Calabria have accepted David’s invitation to remain on the board and to work tirelessly to bring all of our skills and relationships around the world to bear to help to hyperscale this business.”
Centricus CEO Garth Ritchie said, “This transaction will give Arqit the ability to establish itself as a leader in the encryption space – the prospect of the threat from quantum computing will serve to accelerate the broad adoption of Arqit technology. This is a deep tech company which is many years ahead of the market. Arqit has protected its IP by remaining in stealth mode whilst filing over 1,000 claims on more than a dozen patent applications. It is thanks to funding from the British Government and its VC partners that Arqit is now ready to commercialize and scale its product suite; this will complement an already strong cohort of launch customers.“
David Williams, Arqit CEO, said, “The world needs simpler, stronger cyber security, and Arqit addresses that need. After four years of innovation in stealth mode by a world leading multi-disciplinary teams of scientists and engineers, we are ready to go to market. This technology is important and we need to take it to hyperscale as quickly as possible, because the problems we solve are problems for everyone. 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.”