A Canadian startup has signed a second contract with the European Space Agency (ESA) valued at US$1 million to develop an upgraded prototype quantum sensor to be used in

space for Earth observation missions that will launch in 2028. The agreement signed by the numbered company doing business as SBQuantum is an extension of its first deal with the ESA inked last August, when the agency tasked it with conducting a feasibility study of its technology — a device that measures magnetic fields leveraging quantum mechanics.

“Securing this second contract with (the) ESA is the latest in a series of strong signals from the market indicating the vast potential our quantum magnetometers offer as a sensor deployed in space,” David Roy-Guay, founder and chief executive of SBQuantum, said in a statement on Friday.

The ESA’s goal of deploying quantum sensors in space is to collect better data on changing ocean currents and temperatures and shifts in the Earth’s magnetic field, which can be useful for navigating air and sea travel using compasses and global positioning systems (GPS). For example, the technology can help track magnetic storms that disrupt navigation and communications on Earth.

“The Earth and its ecosystem are evolving. Humankind needs to better monitor (these) changes … so we can fully understand them, prepare and adapt,” Roy-Guay said.

The Sherbrooke, Que.-based company is also one of three finalists — and the only Canadian contender — in the MagQuest Challenge, which aims to uncover new tools to monitor changes in the Earth’s magnetic field and is operated by the United States’ National Geospatial-Intelligence Agency (NGA) under the Department of Defense.

In the fourth and final phase of the program, SBQuantum will send its sensors into space next March on a Space Exploration Technologies Corp. (SpaceX) ride-share mission to collect geomagnetic data.

“We have already passed all testing successfully,” Roy-Guay said in an interview, adding SBQuantum’s technology was tested at the National Aeronautics and Space Administration’s Goddard Space Flight Center.

There aren’t any intellectual property sharing requirements to participate in the MagQuest challenge, he said, but SBQuantum is working with Washington, D.C.-based space satellite company Spire Global Inc. as its subcontractor for the program. The NGA will “presumably” purchase the most successful technology once the MagQuest Challenge is completed, he said.

Founded in 2017, SBQuantum has secured $15 million to date in research and development contracts, grants and

Scientific Research and Experimental Development tax credits from the federal government, including the Natural Sciences and Engineering Research Council, the Canadian startup program Creative Destruction Lab and India’s Clean Energy International Incubation Centre. It is preparing to raise its first venture-capital funding round.

The company has already sold “small batches” of its magnetometers to users and is on track to launch a public-safety-focused product on the market in 2026, Roy-Guay said. Its devices also potentially have dual-use applications in space and on Earth, he said.

If its technology works in space as demonstrated through its ESA contract, he said it will open the door for more space-based applications, including altitude control, guiding space rovers that explore different planets and improving intelligence, surveillance and public safety work.

The applications closest to commercialization are mining surveys in remote parts of the world that use drone-mounted quantum sensors. Public safety applications, including screening people at airports, schools or places of business, are “not far off,” according to Roy-Guay.

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The company has also developed “beyond-the-wall sensing capabilities,” which can identify moving metallic objects through a wall, for the Canadian Special Forces and is actively deploying that technology in the field, he said.

Earlier this month, the Canadian government announced $223 million for quantum research and $111 million for industry-focused measures over the next five years under its new Defence Industrial Strategy. SBQuantum “anticipates investments” through various federally funded, quantum-focused testing streams and programs.

The company signed a contract with the Canadian Space Agency (CSA) last year to develop improved sensors for navigation that can be applied to space-based use cases and mineral exploration in the North. Its latest agreement with the ESA was supported by the CSA’s Space Technology Development Program, partially funded by Canada’s National Quantum Strategy launched in 2021.