Shapeways has apparently struck an agreement to sell its software assets, likely indicating a fundamental change to the company as we know it.
Shapeways as at one time one of the leaders in the industry, with one of the first operations to offer 3D print services to the public. They refined the service to attract designers to the platform through the use of customized designer stores, another industry innovation. It was quite exciting to visit them in Brooklyn back in 2012.
However, they eventually faced increased competition from other 3D print services, as well as from 3D printer manufacturers: with dropping equipment prices, increasing machine capabilities, and more knowledge of how to 3D print, many potential Shapeways customers simply printed their own items.
This caused Shapeways to attempt a maneuver to reshape the company as a service for industry. They gained access to professional equipment and sought customers in that area. In the 2020 era they gradually pivoted towards a new market that could have been more profitable.
That was a good move, and indeed there are several other companies that are doing very well providing 3D print (and other) services to industry, such as Protolabs and Xometry.
With that enthusiasm, Shapeways “went public” by entering the stock market back in 2021. They raised a huge amount of money by doing so, and soon after the company’s valuation reached US$564M, according to our weekly leaderboard.
Unfortunately, it didn’t work out. The company never seemed to catch on with industry, at least to the degree necessary to justify the massive investment and valuation. Over the past 2-3 years the company valuation has continually dropped, with recent valuations under US$8M. That’s only 1.5% of their highest valuation.
Shapeways couldn’t seem to break the pattern, and some months ago they announced they were undertaking research to determine a strategy for the future. It now seems that that analysis has resulted in a decision. Shapeways explained:
“[Shapeways] has entered into an asset purchase agreement in connection with the sale of its software business to OTTO dms, Inc., an entity wholly-owned by Shapeways’ Chief Executive Officer, Greg Kress and the Executive of Shapeways’ software business unit, Greg Rothman.
As previously disclosed, the Company has been working with advisors while considering strategic alternatives, and is actively taking steps to sell a material portion of the Company’s assets. In the course of market checks conducted by the Company’s advisors and preliminary discussions with potential purchasers, the Company has received indications of interest to acquire either its manufacturing business or software business, but not both together.”
Evidently the management committee simply decided to sell off the assets of the company, as they could not identify a way forward given the circumstances.
What exactly is being sold?
“The transaction is expected to close on or around May 20, 2024, subject to customary closing conditions. The transaction is limited to the sale of the Company’s OTTO and MFG assets, and does not affect its proprietary, internal-use software, “InShape,” which enables the Company to fully digitize the end-to-end manufacturing workflow and is used by its internal manufacturing locations and external supply chain partners.”
Apparently Kress remains the CEO of Shapeways, while Rothman will run the new OTTO company.
This sale represents some of the assets of Shapeways, but there are more elements remaining. One is InShape, their proprietary internal system. As for that and the other assets, Shapeways explained:
“The Company is continuing to pursue strategic alternatives for the core manufacturing business, and is engaged in ongoing discussions with potential acquirers. There can be no assurance that any of these discussions will result in any transaction.”
That doesn’t sound promising, and it seems that we won’t be seeing Shapeways for much longer.
Via Shapeways
