Mid-2021 offers an excellent opportunity to review the current trends in the AM industry and estimate how they will affect the evolution of digital manufacturing. The events of the past 18 months have shifted the course of many companies, and a giant leap lies ahead that will re-shape the future of the entire AM industry.
Fundraising in the middle of the pandemic
In my view, the first positive trigger amid the turbulent economic fallout of the pandemic was in Q1-2020 when a significant number of 3D printing companies manage to successfully fundraise substantial capital. In the list were Nano Dimension, Velo3D, Arevo, Dyemansion, Carbon3D, and Nanofabrica, among others.
The fact that a sizeable number of companies were active in this way indicated that if investments are to be made, investors strongly believe in the vision of digital fabrication and the big changes it will bring in the coming years. This created the confidence for them to keep looking for new opportunities in the AM market and for 3D printing companies to examine and replan their capital funds for the near future.
Fundraising during 2020. Image source: 3D Alliances
The 3D printing stocks boom
The second push to the market came during Q4-2020 when publicly traded 3D printer manufacturers uplifted their forecasts after experiencing increased interest by the market for independent manufacturing solutions. The background for this was the new global supply chain challenges the pandemic had created.
From October 2020 to February 2021, leading companies’ 3D printing price stocks skyrocketed. Stratasys surged from $12.5 to $55 to a market cap of $4.5B, 3D Systems went from $5 to $55 to a market cap of $6B, and ExOne moved from $10 to $65 to a market cap of $1.5B. The immediate impact was a higher evaluation of non-publicly traded 3D printing companies that were looking for fundraising or M&A or to go public themselves.
3D Systems stock is leading the trend. Images source: Yahoo finance
Here come the SPAC & M&A
Simultaneously, Desktop Metal went public via a SPAC deal with a price of $10 a share and a market cap of $2.5B, raising over $500M. By February 2021, it had jumped over $30 a share to a market cap of $7.5B. This amazing event created a unique window of opportunity for 3D printing companies that were looking to become publicly traded companies or to raise high valuation funds. Among the companies that followed Desktop Metal raising funds via SPAC mergers or the stock market were Markforged, Velo3D, Shapeways, and Massivit, among others.
A high valuation of 3D printing companies also accelerated M&A activities, including Desktop Metal acquiring Envisiontec, Protolabs acquiring 3D Hubs, Nano Dimension acquiring NanoFabrica. Consolidation had been in the air for several years, but 2020 seemed to accelerate the process and bring companies and investors to decision points.
What will 2022-2023 look like?
Now comes the big question – how will all the above affect the AM industry for the coming years? Here are some of my thoughts on what may be coming:
Fundraising - windows of opportunities tend to be temporary. Therefore, any company looking to raise capital that has not yet completed the process will try to take advantage of the relatively comfortable conditions in the market. Still, there is a lot of money looking at new and exciting investments.
3D Printing stocks – from the peak point in February 2021 to date, 3D printing stocks dropped between 30%-50% taking some of the hype to a more realistic level. The main element that will influence the prices for H1-2021 and 2022 is fewer hype dreams. Stock prices can’t sustain hype for a long period of time.
SPAC & M&A – additional companies are in the process of a SPAC merger, and this will continue as long as the window of opportunity remains open and the general valuations in the AM industry stay high. As for M&A, part of the capital raised will be used for consolidations, and companies like Nano Dimension, Stratasys, & Desktop Metal will definitely continue to expand their portfolios by acquiring complementary technologies.
A big technology leap ahead? One last thought: part of the raised capital will be used to accelerate the R&D of many companies, taking current and new technologies to uncharted areas, including more sophisticated 3D software solutions, faster 3D printing systems with more industrial-grade materials, and more automated post-processing solutions to streamline the AM workflow.
Therefore, I believe that in the coming one to two years, we will experience a big technology leap with new and exciting solutions for producing end-use parts. There are interesting times ahead!