Will QNu Labs Script India's Cybersecurity Story In A Quantum World?

Geeks call it Q-Day. The rest of the world calls it doomsday.

But, what’s so dreadful in the Q? It stands for quantum computer – one that’s more powerful than any built yet – and the day is when such a device would shatter the world of privacy and security.

And, how would it be possible? A bravura act of maths, involving separation of some very large numbers, say, running hundreds of digits, into their prime factors. These numbers could crack open all the sensitive information stored under digital locks.

A quantum computer can fundamentally undermine the encryption protocols that governments and businesses have trusted for decades by resolving calculations that would take more than 10,000 years in less than 10 minutes. The same application simultaneously drives drug discoveries ahead by decades. In fact, it is this superposition that defines the power of quantum computing.

So, Schrödinger’s cat can be dead and alive at the same time?

It can’t be figured out unless the cat is out of the box. But there’s a small problem – there’s little scope in quantum physics to assume the fate of the cat till then.

Sunil Gupta, a cybersecurity veteran and entrepreneur, based his years of experience on the core idea of working on quantum cryptography coming from IIT Madras professor Anil Prabhakar and deeptech entrepreneur Srinivasa Rao Aluri and teamed up with technology veteran Mark Mathias in setting up QNu Labs back in 2017.

“It is this relative probability that triggered our interest in quantum security,” Gupta said. The idea, according to the chief executive, was simple: despite India spending billions of dollars on cybersecurity every year, incidents of cybercrime are only rising exponentially. India’s total organisational cost of data breach reached a record INR 22 Cr this year, clocking a 13% on-year surge.

As the country’s $1 Tn digital economy sprints to make up a fifth of the national income by FY30, cyberthreats are fast turning into a pandemic, calling for an urgent solution. “We wanted to find out if quantum cryptography could do this.”

At a time when tech giants like IBM, Microsoft and Google are focussed on building scalable quantum computers, QNu Labs claims to have pioneered quantum cryptography and encryption solutions.

Before there’s a bolt from the maybe-future, it’s better to brace for the worst.

Staying Ahead Of The Clock

Researchers since the 1990s knew that quantum computing, which draws on the properties of subatomic particles to carry out multiple calculations at the same time, might some day threaten the encryption systems widely in use today.

The danger was not about future breaches alone, but for past ones, too. Troves of encrypted data could be unlocked after the so-called Q-Day.

No one knows when, if ever, quantum computing will reach that degree. Today, the fastest quantum computer is the Condor, developed by IBM, with 1,121 superconducting qubits, as the quantum equivalent of transistors are called. That figure would probably need to reach tens of thousands, maybe millions, before today’s encryption systems crash.

“Although the world is yet to have its scalable quantum computers, once that happens, and the hackers get access to such computers, they will break the mathematics and brain behind the encryptions, which has extremely complex mathematics,” Gupta said.

QNu Labs was incubated at the IIT Madras Research Park by a group of ultra-HNIs with a $3 Mn investment in 2016. The idea initially was to build something in deeptech. Building a strong founding team took some time. The business operations took off in 2017 with QNu beginning to build a quantum random number generator (QRNG) and a quantum key distribution (QKD).

But the game staggered even before it could pick up pace.

‘God Does Not Play Dice’

The words of Albert Einstein came to haunt the founders when they failed to get the funds needed to build the first batch of products.

“We faced challenges as we were way ahead in time. When in 2018 we built our first products, we were at least 15 years ahead, and no VC wanted to risk their investments by parking money into QNu at that time,” Gupta recounted.

That’s when QNu broke down its entire journey of building the products into four phases: proof of science, proof of tech, proof of business, and proof of scale. This essentially allowed the startup to dedicate a few more years to building the science itself.

“We spent months gathering insight into quantum physics. We got some protocols done, and built the electronics and hardware.” In 2019, the company secured its first customer from Saudi Arabia, with an INR 1 Cr order.

Opportunities began pouring in since, particularly from the defence space, including the armed forces, Defence Research and the Development Organisation (DRDO), following a win in the iDEX challenge. Besides, research institutes and R&D labs also started procuring its quantum cryptography solutions.

In 2021, QNu set up India’s first quantum lab for the Indian armed forces at Mhow Cantonment Area in Indore.

It raised its first institutional round from Speciale Invest the same year. In 2023, it raised $6.5 Mn in its pre-Series A1 funding round with Lucky Investments’s Ashish Kacholia joining the captable. The startup has so far raised about $20 Mn, which includes its recent INR 60 Cr ($7 Mn) funding led by the National Quantum Mission.

But what is it that’s being created at QNu Labs?

Building For A Quantum World

QNu Labs generates qubits, which are the basic unit of information in quantum computing, but makes these atoms randomly collapse into zero or one – from quantum state to classical state – that ensures classical keys of encryption are generated even when hackers try to crack codes using quantum computers.

“When I have to send you a piece of information and ensure nobody is listening, I will not send the classical information on the optical fibre, I would rather send quantum information. Now, if somebody tries to copy the information while it is going on the optical fibre, it will collapse with our quantum cryptography. The moment it collapses, errors will occur in my system, and the information will be destroyed, flagging that someone was trying to tap into it,” Gupta explained.

That’s why QNu found its biggest use case in defence, where armed forces stay connected via optical fibre networks. QKD is a secure communication method that uses quantum mechanics to generate and distribute cryptographic keys, ensuring secure data transmission.

Its QKD product, Armos, and QRNG product, Tropos, have about 10 patents, and they are largely deployed as a platform with hardware and software applications. The hardware part comes in boxes that are usually deployed in the data centres, while the application can be installed across laptops, iPads, and mobile phones.

The company also has solutions for securing drones, satellites, and WiFi communications.

The world has now come up with algorithms called post-quantum cryptography (PQC), said Gupta, explaining that they provide more security against attacks from quantum computers and will replace the existing complex algorithms in cryptographic systems. QNu remained ahead there as well, and has built a product, named Hodos.

From defence, QNu has expanded to enterprise customers around the world.

Decrypting The Prospects For QNu

The $1.88 Bn global quantum economy is roaring at 27.3% a year to reach $4.89 Bn by 2029, setting venture capitals rushing with a $2 Bn corpus in 2025 alone. No wonder, at the wheel of this growth sits cryptosecurity, a $245.62 Bn market, projected to nearly double to $500.7 Bn by 2030, as online threats are set to surge with the use of artificial intelligence (AI) and quantum computing.

A World Economic Forum report suggests that 40% of organisations around the world have started to take proactive steps to assess and understand the quantum threat.

QNu claims to be one step ahead in assessing and making the best use of this growing market needs. A steady rise in its revenue reflects the growing demand for its solutions. QNu clocked INR 24 Cr in revenue in FY24. The company hopes to have nearly doubled the revenue in FY25, though the audited results are yet to be out.

But, profitability is still far away as the company is investing heavily in technology building. “We are investing in the next three to five years of technology. We are building chips that can replace these boxes (the hardware part), and hence reduce the form factor,” he said. “We are building a quantum dome for India, a secure quantum shield, which will comprise different pieces of technology. Not only optical fibres, tomorrow’s laptops, mobile phones, satellites, drone and submarine networks, every wireless network will have to be quantum safe.”

With a stack full of tech ready to combat cybersecurity threats in a quantum world, QNu hopes to define India’s technological prowess beyond AI.

[Edited By Kumar Chatterjee]

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