Osborne Clarke advises QuantumDiamonds on EUR 91 million Series A financing round for quantum-based chip inspection

Osborne Clarke has advised QuantumDiamonds GmbH, a Munich-based DeepTech start-up in the field of quantum-based precision measurement technology for the semiconductor industry, on its Series A financing round. The total funding of EUR 91 million combines an equity-based Series A round of EUR 15 million with EUR 76 million in non-dilutive subsidies under the European Chips Act.

QuantumDiamonds was founded in 2022 by Dr Fleming Bruckmaier and Kevin Berghoff as a spin-off from the Technical University of Munich and develops quantum sensor technology based on synthetic diamonds for non-destructive testing of complex semiconductor structures. The subsidies totalling EUR 76 million come from the European Union, the Federal Ministry for Economic Affairs and Energy and the Free State of Bavaria and are among the first Chips Act subsidies granted to a young European DeepTech company in the manufacturing sector. The EUR 15 million Series A round was led by World Fund; other investors include Bayern Kapital, IQ Capital, Earlybird, First Momentum, UnternehmerTUM Funding for Innovators, Creator Fund, Onsight Ventures as well as several business angels.

With its technology, QuantumDiamonds addresses key bottlenecks in quality control in the semiconductor industry. Modern high-performance chips consist of complex, multilayer 3D structures in which hidden defects are difficult and usually very time-consuming to detect using conventional, often destructive testing methods. To address this, QuantumDiamonds uses quantum sensors in synthetic diamonds that make current flows inside microchips visible without destruction. The first commercial system, QDm.1, enables precise 3D fault analysis on the nanoscale; the company is already working with nine of the ten leading chip manufacturers worldwide, is building a new production site in Munich and expanding its engineering team.

“DeepTech financings such as QuantumDiamonds’ Series A are a crucial lever for strengthening Europe’s role in the semiconductor industry,” says Robert Marx, Counsel at Osborne Clarke. “Such transactions demonstrate how venture capital and industrial policy programmes can together help build key technologies in Europe and bring them into series production.”

Comprehensive advice on structuring the Series A financing round

Osborne Clarke provided QuantumDiamonds with comprehensive advice on the corporate and contractual aspects of the Series A financing round. The advice covered in particular the structuring of the participation, the design of the participation and governance arrangements typical for venture capital, as well as the negotiation of the financing documentation with the international investor group. The focus was on the specific requirements of a growth-oriented DeepTech financing with several venture capital investors and business angels, embedded in an environment of state subsidy programmes and high capital intensity in the build-out of production capacity.

With its expertise in transactions and tax law, Osborne Clarke was able to support QuantumDiamonds GmbH in implementing the financing round in a manner that was legally robust and at the same time pragmatically structured, thereby contributing an important building block for scaling the business model.

The Osborne Clarke team was led by Robert Marx with Partner responsibility held by Till-Manuel Saur (both Transactions) and included Ann-Kristin Lochmann (Tax).