Venture Capital Strategies for Additive Manufacturing (Part 2)
On December 8th, I started a series of posts introducing strategies that startups / venture capital firms can employ in the additive manufacturing (3D printing) space, beginning with The Full Stack. In part two, I introduce how additive manufacturing is poised to make (and in many cases, is already making) hardware startups more viable for venture capital investment, while unlocking scientific discoveries in our universities’ research labs.
Venture Capital Strategies for Additive Manufacturing (Part 1)
Despite all the media hype that has been associated with 3D printing, news stories alone do not create good venture capital opportunities and although the area can boast a few notable exits, it ranks far behind the VC bread-and-butter investment areas, such as software and social networks. As part of my MBA at London Business School, I investigated the venture capital opportunity associated with additive manufacturing and I believe there are four themes with significant VC/startup promise that will emerge from additive manufacturing in the coming years.
In the coming series of posts, I’ll overview each strategy, starting with going after Chris Dixon’s full stack:
The term “disruptive technology” is frequently (over) used when describing any new gadget or invention and the popular press’s description of additive manufacturing is no different. With a number of printer manufacturers targeting the consumer market, 3D printing has been hyped as a game changing technology, however, very little rigorous analysis has been undertaken in order to determine whether or not additive manufacturing can be accurately described as a disruptive technology. Rather than deferring to popular media hype, it is useful to refer to Clayton Christensen’s (who coined “disruptive technologies”) definition from “The Innovator’s Dilemma”:
Although the recent acquisition of cloud-based 3D design and publishing startup, Lagoa, has yet to generate significant headlines (neither company have officially announced the deal on their respective websites), La Presse.ca and Techvibes are reporting that the US CAD giant has paid $60-62 million for the young, Montreal-based Lagoa.
The deal represents another notable acquisition-exit for an advanced manufacturing service/software company. Although the details of the deal and the previous venture-backed investment rounds are not available, I’ve gone through the exercise running some conservative estimates to better understand how the venture capital community should regard the transaction: