They say investors have soured on the 3D print industry, but why exactly is that?
In the past year or so, it’s become increasingly challenging for small and large 3D printer manufacturers (and those in related areas) to raise funds from investors. Investment is key to growth, as it allows companies to spend more to develop their products or expand their sales force to generate more revenue. Without investment, everything just slows down. Sometimes the slowdown is enough to prevent a company from operating at all if they can’t hit the market quickly.
Investment is therefore important. There is plenty of money around; the question is how does it get to the 3D print companies that need some?
That happens through a variety of paths, including venture capital firms, angel investors, larger companies wanting to get in on the 3D print action, etc.
Investment happens only when the investor has trust that the investee will do good things with the money, namely growing the operation and returning even more money to the investor at a future date. Without trust, no investment occurs.
Lately, there hasn’t been a lot of trust. That’s because investments in the past haven’t panned out, and in several cases, the investments have literally disappeared entirely. These incidents have caused a dramatic loss of trust in the industry as a whole, and it’s affecting everyone, including those that really do have good things to do with investment money.
What were all these investment failures? Why has trust been lost? I took a look at several high-profile companies on the stock market to see exactly how terrible it’s been.
How shall we examine these companies? A number of them “went public” on the stock market in recent years, so we’ll examine how things went from their inception on the market to today. For those that have been around longer, we’ll pick the peak value over the past five years. We’ll pretend we were an investor at those points, placing a hypothetical US$1M in each company at those points and calculate the value we’d have in our portfolio today.
| COMPANY | PEAK DATE | PEAK PRICE | CURR VALUE | DECLINE |
| Stratasys | 2/5/2021 | $51.72 | $181,168 | 82% |
| 3D Systems | 2/5/2021 | $47.95 | $75,078 | 92% |
| BigRep | 7/31/2024 | $18.84 | $115,718 | 88% |
| Nano Dimension | 2/12/2024 | $15.60 | $160,256 | 84% |
| Desktop Metal | 2/5/2021 | $312.50 | $7,776 | 99% |
| Markforged | 2/26/2021 | $127.50 | $23,843 | 98% |
| Velo3D | 10/1/2021 | $276.50 | $2,966 | 100% |
| Shapeways | 9/24/2021 | $80.64 | $0 | 100% |
| Fast Radius | 5/20/2022 | $35.88 | $0 | 100% |
| Xometry | 7/30/2021 | $74.66 | $588,937 | 41% |
| Proto Labs | 2/5/2021 | $216.56 | $184,152 | 82% |
| $1,339,893 | 88% |
As you can see, there have been some very steep declines. Had we invested US$1M into these companies on those dates, we’d have lost almost 90% of our money at this point.
Note, however, that there was a market peak in February 2021, after which most companies fell in value. Even without this peak, there are still massive losses. It’s highly unlikely that anyone would have actually invested at these peak points, but that’s not the point. The point is that the market sees this happening: big peak followed by continual declines.
It also doesn’t help the industry’s reputation that several companies were introduced on the market and then instantly fell, and kept falling. The most recent example of this is BigRep, which went on the market last summer at a valuation of about US$260M, and now, only a few months later, have a valuation of under US$30M. At one point they were even under US$20M.
That’s what investors are seeing. Investors aren’t experts in the technology and have limited visibility into this industry. They often look at valuation patterns, and this is what they see: huge losses from most public investments in 3D print technologies. To them, the technology just doesn’t work.
Later, when someone proposes an investment in a new company that is doing 3D printing, that’s what they remember: “This is not a good area to place our investment”. That’s why it’s so incredibly difficult for 3D print startups to obtain investment these days.
It’s a shame because there are plenty of very good startup companies with unique ideas that may succeed in the market, and they will have much trouble growing because of the investment reputation in the industry.
It’s going to take many years of hard work to overcome this barrier.
