Why did it take so long for manufacturers to embrace 3D printing? The technology isn’t new. In fact, companies like 3D System and Starasys have been around for decades. Yes, there have been significant technological advances in terms of software, materials, and machines. But these great leaps forward are a function of something else. Bryan Dow of Mooreland Partners, a leading independent investment bank, may have the answer.
As Dow explains in an article for Gigaom, “there is a clear correlation between the recent increase in interest by public investors . . . and the number of companies formed and acquired.” Between 1987 and 2010, 3D printing companies raised $300 million. From 2011 through the present day, they’ve raised nearly $4 billion in public offerings. The difference is a factor of 13, and no small feat in the risk-adverse years following the Great Recession.
What does the industry’s financial future hold? “If current trends are indicative of . . . prospects,” Dow continues, “the industry is positioned to thrive.” As an investment banker, the Executive Director of Mooreland Partners is especially interested in the robust rate of mergers and acquisitions. The 3D printing industry is also seeing larger deals in terms of dollars. Part of this is because large, established companies are now in the mix.
For example, General Electric plans to introduce the first 3D printed parts in an aircraft engine platform by 2016. Boeing and Airbus, Dow predicts, will follow with other aerospace components. Large companies are also driving developments in 3D printer hardware. Hewlett-Packard recently announced that first HP 3D printer, due out next year. Look for 2D printer giants like Epson and Xerox to enter the mix, too.
What’s the financial future like for smaller companies in the 3D printing industry? After all, funding from venture capital and private equity funds is what Dow calls “negligible”. The world has changed dramatically since the first 3D printer was invented, and the Internet deserves a great deal of the credit. Today, crowdfunding via websites like Kickstarter and Indiegogo are doing what Dow calls “filling the gap” in terms of financing.
So what’s the future of 3D printing? Software and hardware developers, material scientists, and manufacturers will surely debate and disagree. Inventors will also raise money on-line and sell some of their innovations to the highest bidder. There is no crystal ball, but following the money is a sound strategy.
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