3D Systems branches out with new acquisition; NVBots and New Matter score funding; VC funding for 3D printed casts and splints
It was a very busy week in the advanced manufacturing venture space as three startups scored VC funding, while 3D Systems continued to grow through acquisitions. It continued an exciting start to 2015 for the advanced manufacturing startup sector, which, thus far, has shown a bias towards the development of low price printers and digital design.
3D Systems acquires Cimatron, reaches out to non-additive manufacturing
On Monday, February 9, 3D Systems announced it had acquired Cimatron Ltd. for $97 million, making the move the latest in a string to solidify 3D Systems’ position as the leader in additive manufacturing, in terms of both printers and software. Cimatron, formerly listed on the NASDAQ (CIMT), specializes in CAD/CAM software for the manufacturing industry, with specific expertise in 3D design of molds and dies and for machining by CNC and related machines.
Although the move has already been criticized by some industry insiders as evidence that 3D Systems is losing focus by moving outside of the additive manufacturing / 3D printing space, I believe the acquisition represents a lot of promise. Too many people have made artificial boundaries between additive manufacturing and more traditional manufacturing techniques (like CNC milling) in attempt to pit the methodologies against one another. This only hurts manufacturers and product designers, who shouldn’t really care what method is used, as long as it maximizes efficiency, simplifies the process and lowers costs. Any tool that integrates all techniques and allows the user to make the best choice is a win for manufacturers and consumers. By adding Cimatron’s software to their already very strong offering for 3D printing, 3D Systems has the opportunity to move towards integration of manufacturing techniques and become a one-stop shop for manufacturers and designers.
Regarding the financial side, the $97 million price tag looks to be reasonably good business for 3D Systems. The deal was originally announced back in November 2014 and at the time, Cimatron had an total enterprise value (TEV) of around $50 million. As recently as March 2013, the TEV had been estimated as high as $75 million. Furthermore, Cimatron is currently only valued at 1.6x revenue, which is under an average of 2.9x for comparable companies and far below CAD industry leaders. Thus, $97 million looks to be a relative steal for 3D Systems, which undoubtedly took advantage of Cimatron’s stock price slide in recent years. With clever integration, the synergies that every acquisition claims to have (in spades) should be very achievable.
NVBots and New Matter raise funding rounds
This week, two startups with printer technology stemming largely from open-source technology both scored big VC rounds.
First, NVBots announced that it had closed $2 million in seed funding from undisclosed US and international investors. The printer manufacturer, founded by MIT grads, has apparently achieved fundraising success through the equity crowd funding platform Fundable. Unlike other popular crowd funding sites like KickStarter or Indiegogo (which act more as prepayment channels), Fundable allows investors to actually take an equity stake in the companies. Depending on the number, nature and equity stake of the backers, the unorthodox funding method could cause issues down the road for the startup (should it wish to raise money from traditional VCs in the future), but it does certainly represent a success for non-traditional methods of raising seed capital.
NVBots is focused on making automated, cloud connected 3D printers. They have targeted the educational and shared workspace sectors by making it easy for people to print from any device (without having to be directly connected to the printer) and allowing the printer to handle multiple jobs by queuing tasks. This allows groups of users to effectively share one printer. Because of the extended times that some print jobs take, introducing a queue system allows the printer to become a truly shared resource, which is especially practical in educational environments. With NVBots, the innovation is in the interface, not the printer.
Meanwhile, on Tuesday, 10 February, New Matter announced a $6.5 million Series A funding round led by Alsop Louie Partners and including investors Arden Road Investments, Biotechonomy, Dolby Family Ventures, First Round Capital, Idealab and frogVentures. New Matter, like CreoPop and 3Doodler, is attempting to create a viable segment at the lower end of the additive manufacturing spectrum, allowing households (especially those with children) access to 3D printing. However, unlike CreoPop’s and 3Doodler’s free-space pens, New Matter’s printer is actually a desktop printer, capable of fabricating plastic objects developed using software or downloaded directly from New Matter’s website. The printing envelope is quite a bit smaller (at approximately 6 x 4 x 5 inches) than many other, more expensive, desktop printers, but actually exceeds the MakerBot Replicator Mini‘s build space (approximately 3.9 x 3.9 x 4.9 inches) and uses essentially the same fabrication technique. The difference is New Matter’s printer, the MOD-t, costs $249 on Indiegogo, while a MakerBot Replicator Mini will set you back $1375 (according to the MakerBot website). Clearly, New Matter is addressing a completely different group of customers than MakerBot, and that’s probably why investors are so interested. Few families would consider investing over a thousand dollars for a printer to make plastic toys, while $250 (less than the price of a PlayStation 4) seems reasonable to tap into a child’s creativity.
Looking at the deal itself, $6.5 million represents a fairly sizable investment and nearly 10 times the revenue generated from the Indiegogo campaign (a bit over $680,000). Assuming a fairly standard equity take for the new investors for a Series A round, the investment values New Matter anywhere from $15 – 35 million, which is about 20-50 times their Indiegogo revenue. These heady valuation numbers are a good indication that the investors believe New Matter can effectively open up the home consumer 3D printing market.
Customized casts and splints
On Sunday, February 7, Russian startup Zdravprint (Healthprint) announced they had received $100,000 of funding from Maxfield Capital. Zdravprint is currently developing technology that will allow customized 3D printed plastic casts and splints to replace traditional plaster. The procedure would require the patient’s injured arm, leg, ankle, etc. to be scanned and then a customized plastic cast could be printed. Once printed, the cast is then printed and smoothed to conform to the patient.
Zdravprint’s technology still faces a number of challenges, even if developed. According to RT.com, a patient would still require a traditional plaster cast during the initial stages of broken bone recovery. Additionally, it currently takes around 12 hours to print the 3D printed cast. That number would have to be significantly decreased if the technology is to become mainstream, but Zdravprint’s founder believes the problem will be solved within the coming years.