Community 3D printing network 3D Hubs gained a significant boost with a Series B investment round of USD$7M, but I believe they’ll use it to continue their focus switch.
3D Hubs launched not too many years ago with the promise of making all those desktop 3D printers more useful by routing 3D print work towards them. In the beginning it was clearly a network of hobbyists, but it grew substantially and attracted the attention of major investors.
Their first big investment was a then-huge USD$4.5M from Balderton Capital and others in 2014. Balderton, by the way, was one of the original investors in the company in 2013. At the time, we estimated the valuation of the company to be around USD$30M, which, in retrospect, was probably a bit high.
Now they’re announced a Series B investment round of USD$7M, composed of several investors - including once again Balderton Capital.
That’s substantially more cash than the company has ever had to work with. It’s a small company with only 35 staff currently at their posts in Amsterdam and New York City. But what will they do with it? I have some speculation.
The company has been undergoing a significant transformation from a DIY / Hobbyist network into one that provides service to professionals and industry. As we’ve reported, they’ve made a big deal of the addition of multiple types of industrial-grade equipment nodes their their now-vast network of 40,000 3D printers.
The additional money will permit them to take various actions to improve this scenario. They’ll be able to spend more time working with isolated 3D print service bureaus around the world to convince them to join their network. This takes considerable time and money, as in the eyes of some bureaus, they may still appear to be a hobbyist network.
I believe they’ll still maintain their hobbyist network, but from this point forward they’re likely to spend most of their resources on the commercial possibilities.
Reading between the lines of their press release, we see such statements as:
- 3D Hubs makes it easy for product designers and engineers to find the right 3D print solution…
- By connecting a growing number of professionals with 3D printing service providers…
- With 16 Fortune 100 companies currently utilizing 3D Hubs for solutions across the automotive, aerospace, healthcare industries, and more…
- Created an unprecedentedly seamless solution for global industry professionals in varying business size…
It’s clear the company’s direction is towards business use.
There’s another important factor changed by this huge investment.
Previously our valuation of the company was USD$30M, which I now believe to be high. More than likely the value must have been between USD$9-18M, based on typical dilution rates. If we apply those same rules of thumb to today’s announcement, we find their valuation at approximately USD$21M.
What changes then is the personal value (on paper) by the early and previous investors. While they’ve clearly diluted the value of their shares somewhat, I suspect they’re all very pleased with the results so far.
And finally, perhaps the USD$7M will enable them to move out of their accelerator-based office into a real facility of their own.
Via 3D Hubs