The UK cybersecurity startup rocketed to a multibillion-dollar valuation when it listed publicly last fall on the promise of making encryption technology that would protect the defence industry, corporations and consumers alike from the prying eyes of next-generation computer systems.

Founder and Chief Executive David Williams told investors at the time that his company, Arqit Quantum had an "impressive backlog" of revenue and was ready "for hyperscale growth."

But the Wall Street Journal said that Arqit had given investors an overly optimistic view of its future revenue and the readiness and workability of its signature encryption system.

Quoting experts and former staff members The Wall Street Journal the encryption technology the company hinges on -- a system to protect against next-generation quantum computers -- might never apply beyond niche uses.

For it to work the way the company claims, there would have to be a major overhaul of internet protocols.

Arqit disputed that its encryption system was only a prototype at the company's market debut. It insists that it was being used by enterprise customers on that day and subsequently for testing and integration purposes, because they need to build Arqit's software into their products."