Toronto-headquartered Xanadu Quantum Technologies Inc. is merging with U.S.-based Crane Harbor Acquisition Corp., a special purpose acquisition company (SPAC), in a deal that will take the company public at a combined valuation of US$3.6 billion.

The new entity will trade on the Nasdaq and Toronto stock exchanges, subject to approvals. The deal is set to close late in the first-quarter or early in the second-quarter of 2026.

“Today marks a transformative milestone for quantum computing as we bring the leading photonic quantum platform to the public markets,” Xanadu founder and chief executive Christian Weedbrook said in a statement.

“There’s been so much excitement around quantum SPACs recently and (we saw) a great opportunity to take advantage of that,” he said. Quantum computing’s high capital expenditures and long timelines to commercial viability have made SPACs an attractive route to public markets for quantum computing companies. Vancouver-founded D-Wave Systems Inc. went public in a US$1.6 billion SPAC deal in 2022.

Investor interest in quantum computing has also soared in recent months, boosted by endorsements from tech leaders like

Nvidia Corp . chief executive Jensen Huang, who said in June that the technology is reaching an “inflection point.” Public and private investments in the sector reached a record US$6 billion this year.

Quantum is now an easier sell to investors than in previous years, Weedbrook said. “That’s been reflected in the public markets,” he said.

Xanadu’s proposed deal will raise US$500 million, including US$275 million from new private investors like California chipmaker Advanced Micro Devices Inc., also known as AMD, BMO Global Asset Management, CIBC Asset Management, MMCAP Ventures, PlanetFirst and Polar Asset Management Partners. Its existing investors include the Government of Canada and venture capital firms Bessemer Venture Partners Trust, Georgian Partners Growth LP, Radical Ventures Investments Inc., among others.

Weedbrook said that the new funds will largely be funnelled toward hardware advancements. “Historically, 75 per cent of any funds that we raise… goes to hardware, including hardware salaries, fabrication runs, expansion of our facility and so forth,” he said.

It will also be used to finance company acquisitions and new hires. Xanadu currently employs 260 staff and plans to hire “anywhere from 50 to 100” additional people in the next year, Weedbrook said.

Founded in 2016, Xanadu uses photons, or small particles of lights, to build its quantum computers. Weedbrook told the Financial Post earlier this year that the company aims to open a large-scale and commercially viable

quantum computing data centre by 2029. “From the outside, it will look like a normal data centre,” but will be equipped with hundreds or thousands of server racks located on up to two acres of land somewhere in Toronto, Weedbrook said.

The Xanadu CEO has called on the government to invest “a lot more” into Canada’s quantum computing sector. Artificial intelligence and digital innovation minister Evan Solomon has said that a “major quantum initiative” is coming this month. Ottawa is also expected to announce funding for the sector in Tuesday’s federal budget.