Quantum computing firm looks to go public

Zapata Computing sits at the intersection of two hot trends in tech this year: quantum computing and generative AI.

Now the Boston startup is looking to capitalize on the hype by going public in a merger with Andretti Acquisition, a special purpose acquisition company, or SPAC. The deal, announced on Wednesday, values Zapata at $200 million. It is expected to close in the first quarter of 2024, with Zapata listed on the New York Stock Exchange and trading under the ticker symbol “ZPTA.”

The six-year-old company spun out of research at Harvard University and has focused on writing software for future quantum computers and simulating how such apps might run using conventional computers. Zapata is part of a growing cluster of quantum computing-focused startups and labs in the area. (The company’s name is inspired by the Mexican revolutionary leader Emiliano Zapata.)

While fully functional quantum computers are still years away, Zapata has seen growing interest from industrial, pharmaceutical, and other companies looking at using its quantum simulation programs to tackle tough computing tasks, including training and running models for generative AI apps more efficiently than traditional software.

“We create algorithms that leverage the math behind quantum physics to do some really cool stuff,” chief executive Christopher Savoie said in an interview.

Zapata did not disclose its recent financial results with the announcement of the SPAC deal. That will come in a subsequent filing with the Securities and Exchange Commission, the company said.

Becoming publicly traded will allow Zapata to gain access to additional funding opportunities in the future, Savoie said. It’s also helpful when seeking business from government agencies and public corporations.

“With that kind of clientele, being a

public company checks a lot of boxes,” he said. “Because your finances are public and there’s a lot of scrutiny already done on you.”

Zapata employs 60 people, with about one-quarter working in the Boston area.

The Andretti SPAC could contribute up to $84 million in cash to fuel Zapata’s growth, although the SPAC’s investors have the right to withdraw their money before the deal closes. The blank-check company went public in 2022 with championship race car driver Michael Andretti as co-chief executive and his father, racing superstar Mario Andretti, as a special advisor.

SPACs have had a poor track record over the past few years. Wireless internet company Starry and digital therapeutics developer Pear Therapeutics in Boston are among the companies that went public via SPACs and declared bankruptcy this year. Still, Maryland quantum computer startup IonQ went public by merging with a SPAC in 2021 and has seen its stock price almost double since.

Zapata’s deal with Andretti is different from a typical SPAC transaction, Savoie maintained. The Andretti Autosport racing team has been using Zapata’s software for analyzing race data and developing strategies. And Zapata employees sit in the team’s command center during races to help run the software.

“We already knew Michael, we already knew the team,” Savoie said. “This isn’t an idea of ‘There’s some random stock, let’s go match up with them and do this.’ ”