VELO3D announced a new raise of US$28M in investment.
The California-based maker of powerful metal 3D printers has now received a total of US$138M in investment in several rounds. For those keeping track, the latest round is a Series D raise.
And for those tracking the valuation of VELO3D, according to CrunchBase the “pre-money” valuation was US$110M. That means that the new investment will raise that valuation higher, but we don’t know exactly by how much because we don’t know how many shares changed hands. By the way, this is why they call it a “raise”; it raises the value of the company by establishing a new price level for company shares.
That amount of money is a lot, and one wonders what VELO3D might do with it. They say:
“VELO3D plans to use the new capital to expand its product portfolio to include more machine options, compatible alloys, and enhanced software and hardware capabilities. The company anticipates that the injection of fresh capital will help them reach sustainable profitability by mid-2022.”
That sounds like a pretty generic list of expansionary tactics, but there is quite a bit of strategy here. For example, by adding to the selection of alloys that can be 3D printed on their equipment, they automatically open up new markets.
A potential client might require a specific material and if it cannot be 3D printed, then there’s no point in talking to VELO3D. Each new material “turns on” more potential clients. Currently their materials list includes:
I’m expecting them to add more to this list as soon as they can.
This is quite similar to their recent announcement of a “stretch” version of their Sapphire metal 3D printer, where they enabled a new set of clients by simply increasing the build volume in a certain way.
I recently spoke with representatives from VELO3D about this and will have more about the story behind the stretch version in coming days.
Possible VELO3D Strategy
One possibility is that they may use a portion of this new cash to develop an entirely new platform for their technology. While the stretch machine was relatively easy to produce as it re-uses almost everything else in the machine, a new platform could provide openings for further customer diversification.
If I were to speculate — and I will, because, why not — it may be they could work on a machine with a wider build volume, as opposed to the tall aspect of the stretch machine. This would require a lot more work, but if completed VELO3D could offer new capabilities to even more clients.
2021 will be a very interesting year for VELO3D.