If I said the words “3D printing” and “unicorn” to you five years ago, an image of a plastic polygonal model in a garish colour would have been a fair enough deduction. A horse-like creature with a spiralling horn pointing from its forehead, unicorns are the stuff of myth, existing only in fairy tales and on novelty pencil cases. In the finance world however, the term unicorn, coined in 2013, is more a matter of legendary status, used to describe a privately held startup company valued at over 1 billion USD.
As of August, there were reportedly around 260 of these companies in the world, including the likes of Uber, Pinterest and Airbnb, and in amongst those household names, a trio of 3D printing unicorns.
Carbon, a Silicon Valley startup which can count Adidas and Ford amongst early adopters of its super-fast CLIP technology and programmable engineering-grade resins, surpassed the billion-dollar threshold early on, topped up with the launch of a 200 million USD Series D last year. Shortly after, Desktop Metal, manufacturer of office-friendly metal 3D printing systems, reached a billion-dollar valuation just two years in, after a 115 million USD Series D in July 2017 from New Enterprise Associates, Google Ventures, GE Ventures amongst others. Earlier this year, fellow Boston company, Formlabs joined the list after a successful Series C in April raising 30 million USD and an additional 15 million USD in August. It’s the ultimate Kickstarter success story, having started out on the platform in 2012 and growing into one of the world’s leading sellers of stereolithography systems.
Myth or legend?
The elusive unicorn however is hard to come by. In a brilliant keynote talk at TCT Show, Dave Burns, Principal and Founder at Global Business Advisory Services LLP, spoke about the challenges and realities faced by manufacturing technology startups. As someone who has spent 15 years directly interfacing with 3D printing and led a company all the way from startup to IPO, it’s no wonder a number of startups have sought Burns’ expertise when embarking on their next steps. Presenting on the TCT Show stage, Burns explained how at least seven out of ten startups fail (in fact, he believes it’s closer to nine). Why? Lack of market alignment, hiring the wrong team, and crucially, running out of cash.
For manufacturing technology startups, unicorn status is perhaps even more challenging as the overall journey from the initial beg and borrow phase to positive cash flow bliss can take a long time. Those investing in or developing a manufacturing technology, rather than say a new app, Burns said, have to understand that cash flow comes much later, often taking 3-5 years. Seed rounds come later, and they’re usually larger due to the nature of the product, which can lead to startups taking technologies to market too soon.
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Exhibit at the UK's definitive and most influential 3D printing and additive manufacturing event, TCT 3Sixty.
“We have a fundamental problem because to get from where we are holistically and globally with the large thing we're dealing with and get it where we want it to be, we need more investment dollars and we have a dynamic here that makes those investment dollars difficult to come by,” Burns told the TCT Show crowd. “But I remain convinced that the difference between where we are and where we want to go is just investment. It simply is R&D dollars, if we throw enough of them at these basic science problems we have, we'll solve them.”
In the days of the trough of disillusionment, we saw companies make huge cuts, close retail points and disband entire business arms – largely in the consumer sector. Now, we’re on “the cusp” of something, as both Burns and Todd Grimm recently called it, as wistful ideals have been replaced by real production, meaningful applications and factory of the future concepts, validated by major investments from giants like GE. If unicorns are in fact a reality in the 3D printing universe, now might be a good time to start believing.
