Sona Dadhania’s Insights on the Complex Financial Environment of 3D Printing: The 2024 Macro Outlook According to IDTechEx’s Senior Tech Analyst


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Often, trying to understand the trajectory of the global business environment, particularly in the 2020s, can seem overwhelming. The main challenge lies in the complexity of the current macroeconomic conditions globally.

These complexities are challenging to navigate, observe, and most importantly, to interpret. Consequently, many opt-out of trying to understand the overarching “big picture”.

Ironically, this avoidance tends to compound the difficulty, making the task seem completely unfeasible and counter-intuitive. However, every industry, especially the manufacturing sector, does not exist in isolation.

The image that was here provided courtesy of the New York Fed and Bureau of Labor Statistics has been removed according to instructions.

Manufacturing is one of a handful of strategic sectors that is most responsible for shaping, as well as most shaped by, the global macroeconomic trajectory. Despite the inherent difficulties, then, if you can force yourself to diligently follow the daily unfolding of the global economic narrative, it can be an indispensable tool for additive manufacturing (AM) companies in planning their business operations.

With that in mind, I reached out to Sona Dadhania, senior technology analyst at consultancy IDTechEx, and asked her to help me make sense of some of the trickiest areas of the additive manufacturing (AM) industry to get a handle on: the state of mergers & acquisitions (M&As) and the prospect for inflow of investment dollars into the industry. As you can see from her responses, the seemingly chaotic nature of those issues in 2023 becomes much clearer when contextualized within the economy at-large:

“In the broader economy, M&As have dropped as economic uncertainty related to inflation and interest rates has fueled more caution in deal-making. Additionally, financing for potential buyers has become more difficult and expensive to access. It is unlikely for M&As, both in other industries and in the AM industry, to pick back up again until this economic uncertainty resolves to some extent. In the meantime, the deals that we do see will need to emphasize strategic value and growth opportunities to make them worth pursuing in such macroeconomic conditions.”

Along those lines, it is perhaps unsurprising that the largest AM financing rounds in 2023 went to companies whose operations revolve around advanced manufacturing techniques including AM, but otherwise function like contract manufacturers rather than as original equipment manufacturers (OEMs). AM industry stakeholders are clearly being cautious in general about investments that they still view as too risky.

Nonetheless, the investments those stakeholders are still making seem driven by an overall effort towards supply chain stabilization, a motivation also driven by the economic uncertainty related to persistent inflation, high interest rates, etc.:

“The vast majority of companies that received the biggest funding rounds in 2023 do not adhere to the traditional 3D printer OEM business model, where a company sells printers with their proprietary printing technology to end users,” Dadhania noted. “Instead, three of the biggest funding rounds in 2023 were awarded to companies that are fundamentally end-users themselves: Divergent Technologies, Lightforce Orthodontics, and Zeda. While each of them undoubtedly possesses their own intellectual property and innovations supporting their business, none are primarily focused on pioneering new or incremental innovations in 3D printing technology. Rather, their focus is on using AM to address specific verticals: automotive, dental, and aerospace/medicine, respectively. This indicates a broader shift in the industry towards focusing more on applications rather than on 3D printers. It also signifies a change in investor focus, who, in a more cautious macroeconomic environment, are less inclined to invest in just any new technology; they are seeking to invest more in startups with a clear path to revenue generation and profitability. AM startups concentrated on using AM to provide specific products to particular verticals are likely more attractive for financing from this perspective.”

Image courtesy of Seurat Technologies

Even when investors are taking a risk on new technologies, those technologies tend to form the basis for manufacturing service providers rather than a basis for selling 3D printers:

According to Dadhania, new AM technologies are definitely attracting large funding rounds. In 2023, two of the top five biggest funding rounds went to companies developing new print technologies: Seurat Technologies and Fabric8Labs, both specializing in metal 3D printing. However, both these companies are deviating from the traditional printer OEM business model and planning to use their metal 3D printing technology in their own manufacturing facilities to manufacture completed parts for customers. This model eliminates the capital and operational expenses for customers to invest in new manufacturing technologies, potentially reducing the adoption barrier. Investors most probably find this model attractive as it may provide a quicker, clearer path to revenue generation and profitability as compared to traditional printer OEMs.

Interestingly, even though the most-watched predicted M&A deals from 2023 didn’t come to fruition, there remains an expectation that M&As will eventually gain momentum again. In fact, in November 2023, there were two noteworthy acquisitions: Nexa3D bought out Essentium and BigRep took over HAGE3D. Shortly after the latter was announced, BigRep announced a SPAC deal to become a public company on the Frankfurt Stock Exchange.

The subject of successful mergers often validates the notion frequently held by AM industry insiders, of the market being “too fragmented.” This viewpoint was expanded upon by Dadhania, who noted that although the OEM space is indeed diverse, M&As are not the singular solution to this fragmentation:

“While there are genuinely many unique printing technologies, each with their own applications base, there are hundreds, potentially thousands of printer OEMs in the AM industry. Many of these printer OEMs do not have significant, tangible differences that distinguish them from the hundreds to thousands of competitors in 3D printing. So, when I hear people express that the industry is “too fragmented”, I believe they’re referring to this surplus of OEMs who often lack key differentiating factors from their competitors. This probably causes a lot of confusion for end-users. For instance, how does one decide among the 50+ companies offering laser powder bed fusion printers?

To alleviate the confusion for new adopters and lower the barrier of entry to AM, the industry would benefit from having fewer OEMs with such overlaps. However, M&As are not the only route to achieving that. Given the money required to maintain a manufacturing equipment business, many printer OEMs may simply not find enough business to stay active. This will naturally occur as the industry matures, slowly reducing its fragmentation. Nevertheless, M&As that maximize synergies between companies will play a crucial role in reducing industry fragmentation.”

The growth trajectories of all industry aspects apart from hardware will aid in determining how the hardware market consolidates. In simpler terms, as materials portfolios and software platforms standardize, it will become more apparent which machines align best with the feedstock and software markets in their more mature state. Dadhania wrapped up by stressing that a balanced analysis of the AM industry’s dynamics will increasingly require an equal focus on each segment of the overall industry.

“There’s no doubt that materials will play an increasingly central role in driving the AM market; in fact, IDTechEx predicts that the revenue generated from materials sales will surpass that of printer sales within this decade. This is as users find applications that increase their printer utilization and, subsequently, material consumption. Many surveys have also indicated that a small or unsuitable materials portfolio is a key barrier to adoption in AM. Therefore, there is definitely room for innovation and expansion in this area to fuel AM’s growth. Software will also act as an important driver, as the right software can lower the barrier to adoption for end-users and enable them to maximize the potential and productivity of AM.”

And, to reiterate a final time, how critical it is to keep track of the big picture, the dynamics of the materials and software markets can be expected to be particularly affected by the macro outlook. Public policy issues related to international markets for critical minerals are already directly impacting the shape of the metal powders space, and AI and cybersecurity will continue to center the focus of firms on the software side of the AM industry.

So, pay attention to all business news, not just AM news; pay attention to what the Fed is doing, pay attention to supply chains. It’s overwhelming, but if you can wrap your head around microstructures and lasers and rocket engines, you can understand the global business environment — even in the 2020s.

Featured image courtesy of IDTechEX

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