Could Quantum Computing Arrive in 5 Years?
Feb 26, 2025
Kaley Ubellacker
Market Stirrings 🚩
Here's what the week looked like in pre-seed:
$20.5M
10
Data aggregated from proprietary research and Crunchbase; valuation estimate based on 10-20% ownership stake.
“SEED IS THE NEW SERIES A” RINGS TRUER THAN EVER
Seed rounds have experienced significant growth since 2020, with median round sizes increasing by 53% in absolute terms and 30% on an inflation-adjusted basis, while later-stage rounds have either stagnated or declined.
A couple reasons why this might be happening: Firstly, AI is lowering startup costs, but increasing competition, making capital even more crucial for scaling. Additionally, the rise of “seed-strapping,” where companies aim to raise only one round, could be driving round sizes up.
Good Reads 📖
For the rushed reader …
Afore Capital, the self-proclaimed largest dedicated pre-seed investor, just closed its fourth fund, a hefty $185 million, and with it, they’re rolling out “pre-seed 2.0.”
Emerging managers are increasingly turning to special purpose vehicles (SPVs) as a savvy way to navigate the tough fundraising market.
Microsoft just announced a major breakthrough in quantum computing, unveiling a brand-new state of matter—a topological superconductor—and a revolutionary quantum chip, Majorana 1.
For the less rushed reader …
What it takes to stay in check
Afore Capital is A-force to be reckoned with. Afore Capital, the self-proclaimed largest dedicated pre-seed investor, just closed its fourth fund, a hefty $185 million, and with it, they’re rolling out “pre-seed 2.0.”. This new strategy gives them the flexibility to write checks ranging from small to big depending on the founder’s needs, while also supporting both seasoned entrepreneurs and those still in the ideation stage through their Founders-in-Residence program. Afore’s portfolio, which includes Modern Health, Neo Financial, and Hightouch—fresh off an $80 million round at a $1.2 billion valuation—now boasts a collective valuation of $13.5 billion. With that kind of track record, pre-seed is looking stronger than ever Afore.
The venture cappy secret formula
A new venture capital life hack just dropped: SPVs. Emerging managers are increasingly turning to special purpose vehicles (SPVs) as a savvy way to navigate the tough fundraising market. With SPVs, GPs can flaunt exclusive deal flow and make their case for future funding—no megafund required. SPVs are booming, with deals up 31% over the past three years, particularly in hot sectors like AI and healthcare. Managers are also getting more comfortable charging fees (a major shift from the old days) to capture some much-needed revenue. As the secondary VC market grows, SPVs are quickly becoming the "new normal" for standing out in a crowded field. Think of it as the VC version of a Swiss Army knife—compact, versatile, and used by everyone.
New state of matter for a new state of being
Quantum leaping lizards! Microsoft just announced a major breakthrough in quantum computing, unveiling a brand-new state of matter—a topological superconductor—and a revolutionary quantum chip, Majorana 1. This compact quantum processor can hold a million qubits in a fridge-sized space, potentially out-powering all classical computers on Earth. After 19 years of research, Microsoft is getting closer to making fault-tolerant quantum computers a reality, with applications ranging from drug design to nuclear fusion simulations. The company believes Majorana 1 could help create commercially viable quantum tech within the next five years—a timeline much shorter than the decades most experts expect. Looks like we finally have a good answer to "What's the matter?"
Fire Up the Pre-Seeds🔥
Highlights from this week’s pre-seed raises:
climatetech
Everstar - A startup radiating innovation.
Everstar raised $4 million led by Third Prime. With a high profile team from MIT and the CIA, Everstar is developing an AI-powered platform designed to streamline nuclear licensing and regulatory compliance processes, leading to reduced costs and accelerated project timelines.
SaaS
EBO - Booking it to success.
EBO raised $200k from TEDCO. EBO is creating an AI-powered platform that automates media booking processes, aiming to streamline operations and promote inclusivity across various industries.
fintech
Altius Labs - Off the blockchain.
Altius Labs raised $11 million led by Founders Fund and Pantera Capital. Altius Labs is developing a modular, VM-agnostic blockchain execution stack to improve interoperability and performance across Layer-1, Layer-2, and application-specific blockchains.
AI
Incept AI - Diners, drive-ins, and dives + AI.
Incept AI raised $3 million led by Rally Ventures, with participation from 10VC. Incept AI is building an AI-powered system that leverages neural audio processing to automate restaurant orders across phone, drive-thru, and reservation channels.
Outro🚪
Have any questions, feedback, or comments? Just reply here. We iterate and curate the newsletter according to your interests!
Some last matters of business:
If you’re a technologist (engineer or product manager / designer with a technical background) join us on the NVTC LinkedIn group if you haven’t. We’d love to have you!
Sign up here if you’re interested in co-investing with Necessary.
If you’re a startup founder, we’d love to help where we can! Brex provides full-stack finance solutions for startups. Sign up via Necessary and get bonus points.
Thanks for reading, and see you next week!
