QNu Labs is betting big on quantum physics, not AI, to strengthen India’s cyber defence

About a decade ago, when demonetisation pushed billions of Indians onto digital payment platforms, Sunil Gupta saw an issue nobody was talking about: digital trust. 

While the attention was on cashless transactions, Gupta was focused on building India’s own digital security platform. He was convinced that the country’s digital future couldn’t be built on borrowed security tools or imported products. 

“While a billion users were going to come onto the digital platform, India needed its own sovereign and self-reliant digital security platform. There’s no digital economy without digital trust,” Gupta tells YourStory in an exclusive interaction. 

As he pondered over how he would build this trust, he chose not to join the AI gold rush. Instead, he bet on quantum cryptography: an advanced approach that uses the fundamentals of quantum science for encryption to build a sovereign cybersecurity platform. 

This thinking led to the birth of QNu Labs. Founded in 2016 by Sunil Gupta, Srinivasa Rao Aluri, Mark Mathias, and Anil Prabhakar, the Bengaluru-based deeptech startup is bringing quantum physics to cybersecurity. 

At a time when many security providers were turning to AI for predictive threat detection and anomaly spotting, QNu Labs decided to take a different path—quantum cryptography, an advanced method of using the laws of physics to build cybersecurity solutions.

Gupta believes that AI alone cannot fix the fundamental problem of security. If both hackers and defenders have access to similar computing and algorithms, any advantage is only temporary.

“We didn’t choose AI. Instead, we chose quantum because we wanted defenders to have an edge over hackers. No matter how much you spend on traditional security, the problem doesn’t get solved if both sides use the same tools. Our mission was to build a world-class platform, born in India but built for the world.”

QNu Labs, which was incubated by IIT-Madras, primarily develops solutions that shield critical systems from quantum-era threats and protect sensitive data across sectors such as banking, healthcare, government, defence, telecom, data centres, and enterprises. 

Quantum-era threats are risks to current digital security systems posed by the rise of quantum computers.

Leveraging quantum mechanics

Quantum computing is based on the fascinating principles of quantum physics—the science that governs how particles behave at the smallest scales. Unlike classical computers, which process information using bits that are either 0 or 1, quantum computers use qubits, which can be both 0 and 1 at the same time. 

Blending computer science, physics, and mathematics, quantum computers perform certain calculations much faster than today’s machines—especially problems involving huge combinations or probabilities. While they’re still in the early stages of development, these computers could one day be powerful enough to crack the encryption that protects our digital lives, from banking to emails, using advanced algorithms

A recent study by IIDS found that India’s BFSI sector is poorly prepared for quantum threats, with CISOs (chief information security officers) and CTOs (chief technology officers) showing limited understanding of these threats. 

QNu Labs aims to address these threats with quantum cryptography, which is said to be much harder to decrypt. 

While traditional cryptography is based on mathematical computation, quantum cryptography harnesses the laws of quantum physics to secure data in a way it cannot be hacked. It uses individual particles of lights, or photons, to transmit data over fibre optic wire. 

Quantum cryptography relies on the fact that observing or interacting with a quantum state alters it, immediately exposing the presence of an eavesdropper.

While QNu Labs was initially focused on pioneering research, its founders were ultimately driven by the realisation that traditional methods of encryption would soon become obsolete in the face of quantum computing.

“In 2016, no one believed a deeptech startup like this could be built in India,” recalls Gupta.

“People told me to take the idea to the US… that I wouldn’t find funding, talent, or a market here. But I saw that as the reason to build it here. If India wanted to be self-reliant in cybersecurity, we had to be ahead of the curve. 

“I told every new team member, ‘I can’t promise you success, but I can promise you’ll be part of the great India experiment.’ Today, we’ve built not just the technology, but the entire quantum market in India—and we’re on par with the world,” says Gupta 

Prior to QNu Labs, Gupta was the chief operating officer at Paladion Networks, an AI cybersecurity firm. He also served as the COO of EdgeVerve (formerly Finacle), a cloud-based platform and a subsidiary of Infosys.

Suite of hardware and software tools

Gupta says the USP of his startup lies in its suite of quantum-safe products and solutions that are easy to integrate into any system. 

QNu Labs specialises in both cloud-based services and hardware. 

Its flagship product, QShield platform, is a cloud-based cryptographic SaaS offering that uses quantum-resistant algorithms to protect sensitive data, making it suitable for critical infrastructure and enterprises. 

Quantum-resistant algorithms are encryption methods designed to withstand attacks from future quantum computers.

The startup also offers Tropos. a cloud-based platform that uses quantum processes to generate random numbers. An ecommerce platform may use it to generate encryption keys for processing credit card transactions.

Then there is Hodos, a software solution designed as middleware to facilitate the integration of QNu Labs’ quantum-safe keys and protocols into conventional IT/OT systems. It acts as a bridge between quantum security technologies and existing communication infrastructure. 

As for hardware, QNu Labs offers Armos, a  ‘quantum key distribution’ system that uses quantum physics to securely exchange encryption keys between two parties. 

QNu Labs also designs and manufactures quantum security chips in Bengaluru. These specialised chips utilise quantum physics to generate secure encryption keys and detect any tampering, thus protecting data from cyber threats.

Growth and challenges 

Notably, QNu Labs’ initial business centred around securing the optical fibre networks used for confidential communications in India’s defence sector. 

Today, QNu Labs’ technology is used across a range of applications for the armed forces and other sensitive infrastructure. The startup’s hardware and software solutions have been deployed in critical applications in the defence sector, ranging from drones to optical fibre networks. It also offers quantum-safe communication chips for drones and satellite security for strategic use cases.

QNu Labs' association with India’s defence sector began in 2018 when DRDO (Defence Research and Development Organisation) issued its first request for proposal (RFP) to acquire quantum communication technology from the firm.

In 2019, QNu Labs won the iDEX challenge, followed by a major breakthrough in 2020 when it secured its first order from the National Security Council Secretariat, established India’s first quantum lab for the Armed Forces, and trained over 400 defence officers.

In 2022, QNu became the first private startup to receive an RFP from the Armed Forces on a nomination basis.

Currently, the startup has a team of over 100 professionals, including quantum physicists,  cryptographers, and cybersecurity specialists. 

Gupta says one of the primary challenges that QNu Labs faced in its early years was the lack of conviction and interest from venture capitalists in quantum computing. Most investors didn’t see a strong business case or a clear path to returns from quantum technology, as the field was seen as being too early-stage and research-heavy. 

However, this mindset is slowly changing, he adds. 

Last month, QNu Labs raised Rs 60 crore in a Series A funding round led by India’s National Quantum Mission, a government initiative under the Department of Science and Technology.

Other participants in the round included venture capital firms and investors Lucky Investment, Speciale Invest, Tenacity Ventures, and Singularity AMC.

The startup, which holds 10 patents, is among a small clutch of global firms offering market-ready quantum-safe cybersecurity solutions. Its competitors in quantum security and cryptography include QuSecure (USA) and Post-Quantum (UK).

The company’s revenue model combines product sales, subscription-based cloud services, and long-term service contracts with enterprise and government clients. A chunk of its business is driven by its hardware offerings, where clients purchase the hardware along with a perpetual licence and an annual maintenance contract.

QNu Labs also caters to sectors such as BFSI companies, PSUs, healthcare providers, telecom giants, and automobile brands.

Apart from India, the startup has also established a strong presence in the Middle East, with offices in USA and Australia.

The company has built strong alliances with key institutions such as National Quantum Mission, IIT Madras, IIT Bombay, NASSCOM DeepTech Club, DSCI, and IISc. It has also formed several partnerships with the Indian National Space Promotion and Authorisation Centre.

“India has a unique opportunity to lead, not just in tech adoption but also in tech creation. With the government launching missions like the National Quantum Mission and other initiatives, the intent is clear. What we need now is a robust ecosystem that links research, industry, and policy in a way that’s cohesive and outcome-driven,” says Gupta.

(The copy was updated.)