425: Horizon Quantum Secures $110M PIPE for SPAC Merger

Horizon Quantum Computing, in connection with its proposed business combination with dMY Squared Technology Group, has secured $110 million in PIPE financing from strategic and institutional investors, including IonQ and a Fortune 50 technology company.

Summary

• dMY Squared Technology Group, Inc. (dMY), Rose Holdco Pte. Ltd. (Holdco), and Horizon Quantum Computing Pte. Ltd. (Horizon) entered into Subscription Agreements (PIPE Subscription Agreements) with institutional, accredited, and strategic investors.
• Holdco agreed to issue and sell approximately $110 million of its Class A ordinary shares in a private placement (PIPE Financing), at a per share price equal to dMY's public share redemption price.
• The PIPE financing was significantly oversubscribed, exceeding Horizon Quantum's original target raise by more than 120%.
• Lead investors include IonQ, Inc., one of the world's largest quantum computing companies, and a Fortune 50 technology company.
• Upon the closing of the Business Combination, Horizon Quantum expects to have access to approximately $137 million in cash (prior to transaction costs and assuming no redemptions by dMY Squared's public shareholders), comprising $27 million from dMY's trust account and the $110 million PIPE financing.
• Net proceeds from this transaction will be used to accelerate Horizon Quantum's investments in research and development, strengthen its hardware testbed, and further advance its Triple Alpha development environment.
• The Business Combination is expected to close in the first quarter of 2026.
• IonQ, as a strategic investor, will have the right to select one initial independent director for Holdco's board and a right to nominate a director for as long as it holds not less than 5% of Holdco's outstanding voting securities.
• The closing of IonQ's PIPE Subscription Agreement is conditioned on the parties entering into a commercial agreement for Holdco or Horizon to purchase quantum computing hardware from IonQ.
• IonQ will enter into a lock-up agreement, restricting transfers of its PIPE Class A Ordinary Shares until the earlier of 18 months after the closing date or a Holdco liquidation/merger event.

Sentiment

Score: 9

Explanation: The successful and significantly oversubscribed PIPE financing, coupled with the participation of major strategic investors like IonQ and a Fortune 50 company, provides a very strong positive signal for Horizon Quantum's future and the proposed business combination. The substantial capital injection is expected to fuel critical R&D and technology development.

Positives

• The PIPE financing of $110 million was well oversubscribed, exceeding Horizon Quantum's original target by more than 120%, indicating strong investor confidence.
• Participation from strategic investors like IonQ, Inc. (a major quantum computing company) and a Fortune 50 technology company provides significant industry validation and potential for future collaboration.
• The expected $137 million in cash (assuming no redemptions) will provide substantial capital to accelerate Horizon Quantum's research and development, strengthen its hardware testbed, and advance its Triple Alpha development environment.
• The commercial agreement with IonQ for the purchase of quantum computing hardware suggests a direct business relationship and potential revenue stream.
• IonQ's right to board representation signifies a deep strategic partnership and alignment of interests.

Negatives

• The closing of the Business Combination and PIPE financing is subject to various conditions, including shareholder and regulatory approvals, which introduce uncertainty.
• The total cash available post-combination is subject to redemptions by dMY Squared's public shareholders, which could reduce the expected $137 million.
• IonQ's PIPE Class A Ordinary Shares will be subject to a lock-up agreement for 18 months post-closing, limiting immediate liquidity for this strategic investor.

Risks

• The occurrence of any event, change, or other circumstances that could give rise to the termination of the Business Combination Agreement and/or the PIPE transaction.
• The outcome of any legal proceedings that may be instituted against the parties following the announcement of the Business Combination.
• The inability to complete the Business Combination, including due to the failure to obtain approval of the shareholders of Horizon and dMY Squared or other closing conditions.
• Changes to the structure of the Business Combination that may be required or appropriate as a result of applicable laws or regulations or as a condition to obtaining regulatory approval.
• Horizon's ability to scale and grow its business, and the advantages and expected growth of Horizon.
• The cash position of Horizon following the closing of the Business Combination, which is dependent on the amount of redemptions by dMY Squared public shareholders.
• The inability to obtain or maintain the listing of Holdco's securities on the New York Stock Exchange, the NYSE American, or Nasdaq following the Business Combination.
• The risk that the announcement and pendency of the Business Combination disrupts Horizon's current plans and operations.
• The ability to recognize the anticipated benefits of the Business Combination and PIPE transaction, which may be affected by competition, Holdco's ability to grow and manage growth profitably, and its ability to source and retain key employees.
• Costs related to the Business Combination.
• Changes in applicable laws and regulations or political and economic developments.
• The possibility that Horizon may be adversely affected by other economic, business, and/or competitive factors.
• Horizon's estimates of expenses and profitability.
• Difficulties operating Horizon Quantum's quantum processor and the possibility that it does not provide the advantages Horizon Quantum expects.
• The ability to successfully or timely consummate the PIPE Financing.
• The ability to recognize the benefits of the Side Letter agreement with IonQ.

Future Outlook

Horizon Quantum Computing expects to use the significant capital from the PIPE financing to accelerate its investments in research and development, strengthen its hardware testbed, and further advance its Triple Alpha development environment. The company aims to unlock broad quantum advantage and capitalize on the quantum computing market, which it believes is at a critical inflection point. The business combination is anticipated to close in the first quarter of 2026.

Management Comments

• "Todays announcement is a major milestone for Horizon Quantum and an exciting endorsement of our approach to unlocking broad quantum advantage and creating industrywide software tools and languages." Dr. Joe Fitzsimons, Founder and CEO of Horizon Quantum.
• "We expect this PIPE transaction will provide significant new capital to fund investment in our technology roadmap to develop the comprehensive software infrastructure needed to unlock quantum computing's full potential across real-world applications. We believe that the quantum computing market is at a critical inflection point and Horizon Quantum is well positioned to capitalize on this generational opportunity." Dr. Joe Fitzsimons, Founder and CEO of Horizon Quantum.
• "We are excited to have the support of an impressive roster of strategic and financial institutional investors. We are grateful for the confidence they have shown in our vision and look forward to partnering with them going forward." Dr. Joe Fitzsimons, Founder and CEO of Horizon Quantum.
• "This PIPE transaction, which was well oversubscribed and includes meaningful commitments from some of the most strategic companies in the enterprise computing and quantum industries, is an exciting endorsement of Horizon Quantums groundbreaking innovation roadmap." Harry You, Chairman and CEO of dMY Squared.
• "We remain excited to partner with Horizon Quantum to enable their development of a quantum operating system." Harry You, Chairman and CEO of dMY Squared.

Industry Context

The quantum computing market is described as being at a 'critical inflection point,' indicating a period of significant growth and development. Horizon Quantum Computing positions itself as a pioneer in software infrastructure for quantum applications, aiming to bridge the gap between current hardware and future applications. The involvement of IonQ, a leading quantum computing company, and a Fortune 50 technology company as strategic investors highlights the increasing interest and investment from established industry players in the quantum space, suggesting a trend towards strategic partnerships and ecosystem development.

Comparison to Industry Standards

• IonQ, Inc., explicitly identified as 'one of the world's largest quantum computing companies,' is a lead strategic investor, providing a strong industry benchmark and validation for Horizon Quantum's technology and market position.
• The participation of a 'Fortune 50 technology company' as a lead investor further underscores the relevance and potential impact of Horizon Quantum's offerings within the broader technology landscape.
• The commercial agreement for Holdco/Horizon to purchase quantum computing hardware from IonQ indicates a direct collaboration with a leading hardware provider, suggesting an integrated approach to quantum solution development, which is a common strategy in emerging tech sectors to accelerate market adoption.

Corporate Governance

Related Party Transactions

• The closing of the IonQ PIPE Subscription Agreement is conditioned on the entry into a commercial agreement by the parties relating to the purchase by Holdco or Horizon of quantum computing hardware from IonQ, Inc. (a strategic investor and PIPE participant).

Stakeholder Impact

• Shareholders of dMY Squared: Will vote on the Business Combination and will exchange their shares for Holdco shares, subject to potential redemptions.
• Shareholders of Horizon Quantum: Will become shareholders of Holdco as part of the Business Combination.
• PIPE Subscribers (including IonQ and Fortune 50 tech company): Will acquire Holdco Class A ordinary shares, gaining equity exposure and potential board representation (for IonQ), subject to lock-up periods and registration rights.
• Employees of Horizon Quantum: The capital raise and business combination are intended to accelerate R&D and growth, potentially leading to expanded opportunities and resources.
• Customers of Horizon Quantum: Enhanced R&D and development of the Triple Alpha environment could lead to more advanced and robust quantum software solutions.
• Creditors: The significant capital injection improves the financial stability and growth prospects of the combined entity.

Next Steps

• Holdco and Horizon will file a registration statement on Form F-4 with the SEC relating to the Business Combination, including a preliminary proxy statement of dMY Squared and a preliminary prospectus of Holdco.
• dMY Squared will mail a definitive proxy statement/prospectus to its shareholders for voting on the Business Combination after the Registration Statement is declared effective.
• A special meeting of dMY Squared shareholders will be held to vote on the Business Combination.
• Holdco will file a registration statement for the resale of the PIPE Class A Ordinary Shares within 15 business days after the consummation of the PIPE Financing.
• The closing of the Business Combination and the PIPE Financing is expected in the first quarter of 2026.
• Holdco, Horizon, and IonQ, Inc. will enter into a commercial agreement relating to the purchase of quantum computing hardware by Holdco or Horizon from IonQ.
• IonQ, Inc. will enter into a lock-up agreement with Holdco regarding its PIPE Class A Ordinary Shares.

Key Dates

Recommendation

The successful and significantly oversubscribed $110 million PIPE financing, with strong participation from a leading quantum computing company (IonQ) and a Fortune 50 technology company, provides substantial validation and capital for Horizon Quantum. This funding, combined with the expected $27 million from dMY Squared's trust, positions the company with approximately $137 million to accelerate critical R&D and advance its Triple Alpha development environment. The strategic partnerships, including a commercial agreement with IonQ and board representation rights, further de-risk the investment and suggest strong industry alignment. While SPAC mergers carry inherent risks, the robust investor confidence and strategic backing indicate a compelling long-term growth opportunity in the rapidly evolving quantum computing sector.

Keywords

Quantum computing, SPAC, PIPE financing, Business combination, Horizon Quantum Computing, dMY Squared Technology Group, IonQ, Software infrastructure, Triple Alpha, Technology merger, Private placement