Additive Manufacturing start-ups

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Additive Manufacturing start-ups

Additive Manufacturing considered to be key technology in the future

Additive Manufacturing is a highly dynamic and innovative industry with many start-ups forming the technology landscape. Emerging mostly from university background, start-ups are most active in the area of system development. Other fields include software, materials and AM applications. AM VENTURES is one of the most active venture capital firm in Additive Manufacturing and has put a lot of effort in analyzing the start-up community over the past years. This article features a selection of the results of AM VENTURES’ research on the AM start-up landscape and is complemented by AMPOWER’s commentary and market experience.

additive manufacturing startup

What you will find in this report section

Technical fields for start-ups in Additive Manufacturing

Start-ups from incremental improvements to groundbreaking innovations

Start-ups are bound to create added value among the existing ecosystem to survive and strive. In AM, this ultimately leads to reducing cost, increasing quality or enable reduction of manufacturing time for their customers. The Additive Manufacturing start-up ecosystem can be clustered into four fields:

  • Hardware, such as printing systems and post processing technologies
  • Software, from simulation and data preparation to MES and quality management
  • Applications, utilizing existing AM technologies for new products
  • Materials

Start-ups focusing on hardware solutions are most prominent, especially when developing completely new AM technologies. More than half of the known metal Additive Manufacturing technologies are driven by start-ups such as DIGITAL ALLOYS, TRITONE, INCUS, LITHOZ, VELO3D or SPEE3D. Hardware developments are known to be investment intensive and high risk, since in many cases first earnings take several years.

Software development might have a lower entry barrier due to reduced investments, but faces a highly competitive and dynamic market environment. Typically the start-up involved in software often targets a rather quick buy-out by a large CAD/CAM supplier, since the introduction of a new and stand-alone software solution in established digital environments of enterprises is challenging. Examples for software start-ups are 3YOURMIND and ADDITIVE WORKS.

Companies like URBAN ALPS or CONFLUX TECHNOLOGY are focusing on developing new applications using the unique properties of AM technologies. The resulting product must serve a need only satisfiable by the use of AM.

The last group focuses on developing or optimizing materials for Additive Manufacturing. Companies like 6K, METALYSIS, ELEMENTUM 3D and MOLYWORKS target to develop cost efficient feedstock production, recycling or creating unique alloys. Start-up HEADMADE MATERIALS develops a solution to enable an existing polymer manufacturing technology to be utilized for printing metal green parts.

  • CONFLUX heat exchanger

  • Cutting tool by INCUS

  • AM machine by INCUS

  • CONFLUX heat exchanger

  • 3D Logo Triangle by ELEMTUM on A6061-RAM

  • Rocket engine part by ELEMTUM on A6061-RAM

  • Miniature Napoleon figure by INCUS

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Technical fields

  • Hardware

  • Software

  • Applications

  • Materials

International start-up landscape

Majority of start-ups in hardware

AM VENTURES’ analysis is based on 1,168 startups that are or have been active in polymer and/or metal Additive Manufacturing since 2015. The target region of the analysis is EMEA with 844 identified start-ups. It is considered to be a near complete coverage of the European start-up scene. The coverage of AMER and APAC is lower but still includes over 550 entities.

About 50 % of all analyzed start-ups develop hardware solutions. With only 40 %, the share of European entities in hardware development is considerably below the worldwide average. This might be due to the already highly competitive system supplier landscape in this region as well as the higher entry barriers for start-ups. In EMEA, the acquisition of large funding capital for costly hardware developments is much more challenging than in the US. The high number of hardware developments in APAC can partly be credited to the large number of low-cost FDM desktop 3D printers after the patents expired in 2015.

Regional distribution of success rate

APAC start-ups with highest failure rate

Overall, the failure rate of new entities in Additive Manufacturing is above 70%. In the APAC region the failure rate is even higher at 93%. Start-ups fail because of multiple reasons. In many cases the value proposition for the customer cannot be proven during the early development. Typically for technical start-ups is also a lack of sales and marketing activities. This accounts both for selling the development to investors as well as customers. Four major components are critical for the success of technology start-ups:

  1. A clear and feasible value proposition that creates significant added value to the potential customer
  2. A market, that is mature enough to generate revenue in time
  3. High technical expertise to develop the idea to a finished product
  4. Sales and marketing talent as well as knowledge in order to bring the product to the market

Only 5 to 20 % of all start-ups are successful. In this analysis, “success” is defined as at least a completed series A funding (ideally higher series), exit or IPO while a “surviving” start-up completed seed funding or has an angel investor.

Distribution of surviving and successful AM start-ups by technical field

Hardware and materials prove to be challenging

Successful hardware start-ups are the majority in Additive Manufacturing. However, considering the overall distribution, more start-ups fail in hardware than software and application developments. Additionally, new material products have high entry barriers in B2B markets and consequently struggle to survive. The added value for the user has to be significant to abandon existing supplier relations or compensate additional costs of development and re-qualification of feedstock material. Additionally, new entities usually lack specific certifications needed to supply to regulated verticals.

The defined success rate should be in no way mistaken as a guaranteed long-term sustainable and successful business. Even after acquiring Series A funding, start-ups still face challenges once they enter the market, encounter qualification hurdles or technical difficulties.

Contributor

About AM VENTURES

The leading venture capital firm in Additive Manufacturing has an extensive portfolio of successful international companies such as DYEMANSION, LITHOZ and SINTRATEC. AM VENTURES possesses in-depth technology know-how and is well connected with the most relevant players in the field of industrial 3D printing. As an investment partner, the company provides an industry-leading ecosystem of sustainable strategic investments in hardware, software, material and application start-ups. AM VENTURES can offer customized investments and provides start-ups with access to advanced production technologies. AM VENTURES also introduces entrepreneurs to a pool of industry experts, each one with decades of experience in engineering, production or executive management. Another resource made available is the opportunity to connect with sister companies within Additive Manufacturing from leading hardware providers to advanced production hubs around the world.

More at amventures.com

Arno Held

Chief Venture Officer, Managing Partner

AM Ventures

Data and sources

Last data update: 1 May 2020

Published: 1 May 2020

Source: AM Ventures

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