Desktop Metal announced yet another huge investment yesterday.
The Massachusetts-based company explained that Ford Motor Company has led another round of investors contributing a total amount of USD$65M to the startup 3D metal printer company.
Due to this announcement, it’s highly likely that Ford will acquire plenty of Desktop Metal equipment, perhaps making them one of Desktop Metal’s biggest customers as well as an investor.
The company last announced a major investment last July, when they scored USD$115M in a Series D round. To date, they have apparently raised a mind-boggling USD$277M.
This is quite significant, as it begins to shift the picture for the group of major 3D printer companies. For many years (decades, actually) the field was dominated by only two parties: 3D Systems and Stratasys, both based on original 3D printing process patents from the 1980’s. These two companies accounted for a vast majority of capital in 3D printing and still are massive companies today.
But in recent years that has begun to shift, coincidentally with the expiry of those key original patents. Last December we speculated on how this is shaping up after the announcement that Carbon, a plastics 3D printer company, received a similar massive investment.
That company raised a staggering USD$422M, and our thought was that the valuation of Carbon must thus be something close or even larger than the old guard of 3D Systems and Stratasys. This clearly placed Carbon in the group of leading 3D printer companies.
Now we have a similarly large investment total at Desktop Metal. Their USD$227M is surely less than Carbon’s raises, but nevertheless it likely positions their valuation at somewhere approaching the leaders.
Thus it may be time to add Desktop Metal to the leader group in 3D printer companies.
Interestingly, one of Desktop Metal’s key investors is actually Stratasys! They’ve even partnered with Desktop Metal to permit their otherwise exclusive and extensive reseller network to sell Desktop Metal equipment. This was a shrewd move by Stratasys, but there may be a lot more to come.
Even though there are several other companies developing 3D metal printing processes that are quite similar to Desktop Metal’s (thermoplastic extrusion of green to brown to metal part) interest remains high because, I strongly suspect, of their ability to execute and deliver business.
Desktop Metal is well organized and has put together a very attractive package whose lower cost of acquisition and operation will no doubt be highly attractive to their market.
And that’s another thing: their market is decidedly different than the traditional 3D metal printer market, currently dominated by aerospace, medical and automotive. Those industries are highly regulated and demand precision, certifiable parts from their manufacturing processes.
That’s all fine, but there is an even larger market for metal production that does not require such certifications, one whose cost of parts is a lot lower and thus typically puts them out of range of the traditional 3D metal printer purchase cycles. In other words, they have plenty of potential customers for their products, and that, I think, is what their investors are seeking.
This is good news for Desktop Metal, Ford (whose CTO will now sit on the Desktop Metal Board of Directors) and even Stratasys. It’s even good for the other traditional 3D metal printer manufacturers, who won’t lose much business to Desktop Metal, but who might see greatly increased interest in 3D metal printing due to Desktop Metal opening up new markets.