# PQShield Financial Model Post-quantum cryptography (PQC) hardware and software company building security products on NIST-standardised algorithms - Canonical: https://finamodel.com/startups/pqshield - Excel download: https://finamodel.com/startup-models/pqshield.xlsx - Category: Crypto/Web3 - Model type: 3-Statement - Funding round: Series A - Funding: $7M - Founded: 2020 - Geography: UK (PQShield Ltd); international reach via NIST standards work and global media coverage - Customer: B2B ## About the company PQShield develops post-quantum cryptography hardware IP and software libraries based on NIST-standardised algorithms. It addresses the risk that future quantum computing could undermine conventional encryption, selling technology to chipmakers, OEMs, and enterprise software or security vendors. The UK company was early and pre-revenue when its materials were prepared, with standards still approaching finalisation. Its commercial shape is closer to an IP licensor than a generic cybersecurity SaaS company: hardware customers may pay upfront licence fees and per-unit royalties, while software can carry annual licences. Build a contract and pipeline waterfall by customer type. Forecast design wins, licence fees, deployed units and royalty rates for hardware, plus software contracts, implementation, and renewals. R&D, standards participation, field engineering, and channel costs should remain explicit. Win rate, time to production, royalty-bearing volume, pricing, and renewal rates drive scenarios. ## What's included - 5-year monthly revenue build with stage-appropriate growth assumptions - Full P&L, headcount plan, and operating-expense schedule - Cash-flow statement, runway, and burn-rate tracking - Valuation via exit multiple with a DCF cross-check - Returns analysis with MOIC and IRR - Unit economics including CAC, LTV, payback, and cohort retention ## Product & value proposition - Post-quantum cryptography solutions: unique hardware (silicon IP) and software (cryptographic libraries) implementing PQC algorithms - Positioned on top of standards the company helped define - NIST PQC final candidates and RISC-V Scalar Cryptography extensions - Value prop: future-proof cryptographic security against quantum computers, for any device or system using RSA/ECC today - Target customers implied: semiconductor firms, hardware OEMs, enterprise software vendors, government/defence suppliers - anyone mandated to transition to PQC ## Market - Quantum threat framed as affecting "all cybersecurity infrastructure" - Nation-state cyber attacks doubled in last three years; >500K people affected by video conferencing breaches Feb–May 2020 - RISC-V noted as potential rival to ARM and Intel for IoT and industrial applications ## Revenue model - Likely IP licensing fees (hardware silicon IP for chip designers) - Likely software licensing / maintenance for PQC software libraries - Possible professional services / integration support ## Traction & metrics - 13 hardware and software cryptography engineers (+ 2 new starters at time of deck) - Leading multiple NIST PQC final candidates; advising on all others - Led development of RISC-V Scalar Cryptography extensions - World Economic Forum Tech Pioneer 2021 - Media: CNBC, BBC, TechCrunch, Forbes, The Telegraph, Business Insider ## Competition / moat - Moat: standards participation - PQShield is inside the NIST PQC standardisation process, leading and advising on final candidates, giving early visibility over all emerging technologies - Moat: team - 13 engineers from Arm, Thales, Cloudflare, IBM, Radboud University, University of Bristol, AIST - Advisory board includes "inventors of modern cryptography": Prof Chris Peikert, Prof Peter Schwabe, Prof Artur Ekert - Moat: RISC-V standard leadership - Competitive landscape not addressed in deck; no named competitors shown ## Team & funding ask / use of funds - CEO & Founder: Dr Ali El Kaafarani - VP Strategy: Ben Packman - VP Operations: Michael Vroobel - VP Business Dev: Alan Grau - Technical team: 13 engineers + 2 new starters, recruited from Arm, Thales, Cloudflare, IBM, Radboud, Bristol, AIST --- ## Recommended financial model - **Archetype + why:** B2B IP-licensing / deep-tech revenue model. PQShield sells cryptographic IP (hardware) and software libraries to chipmakers, OEMs, and enterprise vendors. The closest analogue is an IP licensor (Arm-style): upfront licence fees + per-unit royalties for hardware IP; annual software licence fees for software. A simple 3-statement model built on a contract/pipeline waterfall is appropriate at this stage given no disclosed revenues. - **Forecast horizon & granularity:** 5 years (Year 1–5), annual columns; Year 1 optionally quarterly once a revenue start date is known. - **Key drivers & assumptions:** | Driver | Value | | -- | -- | | Revenue start year | Year 1 or Year 2 | | Number of hardware IP licence deals (Year 1) | 1–3 | | Average hardware licence fee | $500K–$2M per deal | | Per-unit royalty (hardware) | $0.05–$0.20 per chip | | Royalty ramp (chip volume) | 0 in Y1, growing 2–3 years after licence | | Software licence ACV | $100K–$500K per customer | | Software customer count Year 1 | 2–5 | | Software customer growth rate | 50–100% YoY early years | | Gross margin (software) | 80–90% | | Gross margin (hardware IP) | 90%+ | | Headcount at model start | ~15 (13 + 2 new starters) | | Avg fully-loaded cost per engineer | £100K–£150K | | Annual headcount growth | 50–80% in early years | | R&D as % of opex | 60–70% | | G&A and sales as % of opex | 30–40% | - **Scenarios (Base / Bull / Bear):** - **Base:** 2 hardware IP deals in Year 2, royalties kicking in Year 4; 3 software customers in Year 1 growing to 20 by Year 5 - **Bull:** NIST standards finalise quickly, defence mandates drive rapid procurement; 5 hardware deals in Year 2, accelerated royalty ramp; 40+ software customers by Year 5 - **Bear:** Standards delayed, slow enterprise adoption; 1 hardware deal in Year 3; minimal software revenue; burn runway risk - **Required sheets / outputs:** 1. Assumptions (all drivers in one input tab) 2. Revenue build (hardware IP licences + royalty model; software ARR waterfall) 3. Headcount plan (by function: R&D, commercial, G&A) 4. P&L / Income Statement (GAAP, monthly or annual) 5. Cash & runway (burn rate, months of runway; key given unknown funding raised) 6. Balance Sheet (simplified - primarily cash, deferred revenue, IP assets) 7. Scenario toggle (Base / Bull / Bear) ## Frequently asked questions ### Is the PQShield financial model free? Yes. The PQShield model is a free Excel download with live formulas. ### Can I change the assumptions? Yes. The workbook is editable and its live formulas recalculate when assumptions change.