Nano Dimension seems to have raised a massive US$50M.
The Israel-based company has been developing unusual 3D printers since 2012, focusing on electronics. Their flagship 3D printer is the DragonFly LDM, a digital manufacturing system capable of 3D printing circuit boards, sensors, antennas, capacitors and more.
They’ve targeted the DragonFly LDM at the manufacturing sector, with the ability to perform low-volume manufacturing. The system includes adaptations to integrate with Industry 4.0 protocols and should fit well into an IoT production world.
The company had previously raised US$29M, known through publicly available material. Now they have raised a whopping US$50M. Their announcement says:
“The gross proceeds of the offering will be approximately $50 million, before deducting placement agent fees and other estimated offering expenses. The Company intends to use the net proceeds for working capital and for other general corporate purposes. The closing of the registered direct offering is expected to take place on or about October 28, 2020, subject to the satisfaction of customary closing conditions.”
The form of this raise is a bit unusual for 3D printing companies, using a technique I had not previously heard of: American Depository Shares.
While Nano Dimension is publicly traded, it does so only on Israel’s Tel Aviv Stock Exchange. The largest stock exchange in Israel, it is not nearly as large as the US stock exchanges. The game here is to attract many investors, and the bigger exchanges have more investors plugged in.
However, for Nano Dimension to be traded on a US stock exchange they’d have to go through a considerable effort to set that up. That would be expensive and time consuming, so they seem to have chosen an interesting alternative route to US investment.
The method they’re using is American Depository Shares. In this approach, a certified American bank actually holds a large quantity of shares. Then the bank offers public US investors the opportunity to buy shares of a special fund integrated with the original company’s shares.
For this transaction, it seems that Nano Dimension sold 16,722,000 shares at about US$3 each — “pursuant to a registered direct offering” — to the bank for this purpose. It’s not a public transaction, as it seems these have already been closed with investors.
This is quite an unusual approach for investment, and I’m wondering if other non-US-based 3D print companies might consider doing something similar. It could be a rather quick way to raise money that otherwise would be difficult to obtain.
For Nano Dimension, the US$50M is a tremendous amount of money and should enable them to much more easily expand operations. One of the biggest expenses for companies that have developed a product is to market and sell it in additional regions, and I suspect that might be where a lot of this cash will be headed.