Sols raises $11.1 million Series B; Stratasys acquires 3D printing consultancy Econolyst
Today, two major deals were announced in the advanced manufacturing world: one, a vote of confidence for a future of mass customization; the other, an acknowledgement that in order for the additive manufacturing / 3D printing market to grow, traditional product manufacturers will require advice on how to best utilize the disruptive technology.
VCs back Sols’ vision of customization
On 27 February, Sols announced they had secured a Series B round of $11.1 million, financed by venture capital firms Founders Fund, Lux Capital, Tenaya Capital, and Melo7 Tech Partners. The New York-based startup is harnessing the power of 3D printing to produce personally customized shoe insoles. Video scans of the foot are combined with physiological / lifestyle information from the customer to create a perfectly customized insole design, which can then be 3D printed. Up until now, the Sols’ insoles were prescribed by medical doctors, but the company is hoping the newest cash injection can allow them to take the technology directly to the end-customer.
This mass customization business model is becoming increasing viable and relevant for startups, especially those in high margin industries like medical devices. Because of the inherent uniqueness of human anatomy, products created through accurate and precise personalized customization yield higher utility. Custom-made orthotics have been available for decades but previously required a lengthy and involved process.
As a child, I endured the process of having custom insoles made a number of times due to medical issues involving my legs and feet. Each time, I was subjected to time-consuming and uncomfortable foot molds followed by weeks/months of waiting for the insole to be fabricated and shipped. Growth spurts meant that the process had to be repeated often and finally the hassle resulted in me giving up on customized inserts and settling for inferior off-the-shelf options. Today, technological progress in 3D scanning, software and printing can make the entire process quick and accurate, without the need for significant involvement of medical professionals or potentially even expensive equipment. This opens a much larger potential market (than exists with the medical insole market today) – children of today and tomorrow that are afflicted by the same medical problems that I experienced as a youth will be able to more easily (and probably more affordably) grow with the proper shoe insoles, enjoying better athletic opportunities and a more comfortable road.
The latest round (bringing total investment up to $19.3 million) shows continued support by Founders Fund and Lux Capital and represents a strong endorsement by the VCs. Sols joins a Founders Fund portfolio that includes SpaceX, airbnb, Spotify, Facebook and Oculus, while Lux Capital continues its support of 3D printing, having already invested in 3D printing marketplace Shapeways. New to the capitalization table are Tenaya Capital and Melo7 Tech Partners, the latter being famous for being founded by NBA star Carmelo Anthony, indicating an increasing relevance in the sports market.
The Series B likely values Sols somewhere between $28 and $110 million (most likely in the neighborhood of $50 million).
Stratasys to grow overall additive manufacturing market by providing better printing advice
On February 27, Stratasys announced that they would be acquiring additive manufacturing / 3D printing consulting and research firm Econolyst. The move will enhance and form the base of the Stratasys Strategic Consulting Division. Although the financials of the deal were not released, the move makes a good deal of sense for Stratasys strategically.
Econolyst has promised to stay independent and agnostic in their consulting services, so while Stratasys can’t expect a direct bump in sales from first order recommendations, the deal represents an acknowledgment that Stratasys is likely to benefit more in the long run from an overall growth in additive manufacturing and is not simply an attempt to grow their own marketshare. Currently, many traditional product manufacturers lack the technological expertise and experience necessary to effectively incorporate new manufacturing techniques like 3D printing into their existing operations. By injecting that expertise and knowhow (in the form of Econolyst), Stratasys is hoping to grow the overall market, taking their appropriate slice and growing their top line as a consequence.
Adding a more robust consulting unit to their existing services is also an attempt to grow business within the existing Stratasys customer base, helping clients better make use of the technology they have purchased – expanding clients’ own business and showing them where they can expand their use of additive manufacturing.