Environmentally-controlled 3D print operations at Precision ADM [Source: Fabbaloo]
I saw a bulletin about a major investment in a 3D print service, and realized something important about this type of company.
The announcement was from Canada-based Precision ADM, a growing metal 3D print service and engineering firm, who explain they’ve secured a pair of key investors.
Precision ADM Investment
The two investors turn out to be Andy Christensen, Founder and President of Medical Modeling Inc, which was subsequently absorbed by 3D Systems in 2014; and Joe Allison, who co-founded Solid Concepts. That company was acquired by Stratasys in 2014 and ultimately became what is now Stratasys Direct.
That’s good news for Precision ADM, of course, as an influx of cash is always welcome. But in this case there is a big bonus in that these two have long experience providing 3D print services to industry, and specifically the industries served by Precision ADM. I’m thinking this partnership should work out quite well, and presumably allow Precision ADM to expand operations. They explain:
”This investment will provide added capital to further the Company’s aggressive growth strategy in the medical device and aerospace sectors, including securing additional manufacturing capacity, quality systems, and material selection for serial production. Additionally, this investment grants the Company the ability to further implement Industry 4.0 strategies.”
3D Print Services Need Investment
My thought is that investment is truly critical for metal 3D print services in ways that are well beyond the needs of most other types of 3D print companies.
The problem is that the current state of metal 3D printing is actually quite expensive to implement. Not only are the machines and materials among the highest-cost in all the world of 3D printing, you must also accompany them with a pricey environmental control system, a squad of well-paid engineers to set up and tune prints and a bevy of large post-processing gear.
If that’s not a capital-intensive business, I don’t know what is. In order to operate, such firms must first spend an incredible amount of money to set up all of the above — even before the first customer pays their invoice. This requires considerable confidence in the operation by investors, who seek to protect their funds.
It can be extremely difficult for these operations to raise funds, and perhaps that’s why Precision ADM ended up with “industry insiders” as investors, simply because they are familiar with this type of business and have the confidence to proceed.
3D Print Service Growth
But even after such an operation is established, business growth must eventually happen. Then it all starts over again, as additional — and large — capital must be raised to pay for more equipment, more engineers and operators, more sales staff, and in some cases even building expansions. Building expansions are doubly expensive due to the need for environmental encapsulation of the new equipment.
The fastest growing 3D print services usually have a “sugar daddy” helping them grow. This is evident with the services from both 3D Systems and Stratasys, who help their operations grow. For standalone services like Precision ADM, it’s a lot harder to attract investment.
But in this case at least, they succeeded.