As alluded to in a recent episode of the 3DPOD, VELO3D plans to go public through a merger with a blank check company backed by tennis star Serena Williams. The deal with special purpose acquisition company (SPAC) Jaws Spitfire Acquisition Corporation will lead to a $1.6 billion valuation and turn VELO3D into the sixth 3D printing company in 2021 to announce the highly anticipated move to the stock market, after Markforged, Rocket Lab, and Rokit Healthcare, as well as Massivit3D and MeaTech. This follows on Desktop Metal’s 2020 SPAC IPO, as well.
The transaction is expected to strengthen the startup’s position as a trusted partner for companies seeking novel manufacturing solutions for complex design challenges. Additionally, VELO3D will also have access to more resources to make substantial investments in its engineering capabilities, product development, sales, marketing, and customer support, expanding its metal 3D printers’ competitive advantage.
Expected to go public in the second half of 2021, the combined company will operate as VELO3D and be listed on the New York Stock Exchange (NYSE) under the new ticker symbol “VLD”. The Silicon Valley-based business said it would raise up to $500 million in cash proceeds for the company and shareholders through the agreement, which includes proceeds from the SPAC merger, as well as from private investment in a public equity (PIPE) deal of $155 million led by Baron Capital Group and Hedosophia.
“VELO3D partners with the world’s most innovative companies leading the future of space travel, transportation and energy,” said founder and CEO Benny Buller, who will continue to lead the company through the upcoming phase. “I am proud that such visionary partners continue to trust VELO3D to build products through methods that were previously impossible. With JAWS Spitfire’s long-term partnership, we expect to extend the reach of VELO3D’s technology and bring its solutions to even more customers globally. As we scale our business and advance our growth strategy, we expect to expand the high-value metal additive manufacturing market and strengthen our competitive position.”
Since launching commercially in the fourth quarter of 2018, the company has serviced innovative customers like Honeywell, Boom Supersonic, Chromalloy, and Lam Research. VELO3D drew a lot of attention when it began supplying its metal AM printers to leading space company SpaceX to build parts for the next generation of starship engines. Later, in July 2020, amid a raging pandemic that resulted in economic distress for businesses worldwide, it received its largest order in company history after an undisclosed aerospace customer bought several industrial metal AM printers worth $20 million.
Its proprietary full-stack 3D metal printing solution enables the production of mission-critical components for space rockets, jet engines, fuel delivery systems, and energy production with better performance at faster speeds and lower costs than traditional manufacturing methods, claims VELO3D. Key to driving adoption in AM, its flagship Sapphire metal printers do not require supports for any geometry below 45°, uniquely enabling engineers to realize designs with overhangs down to 0° (horizontal) and large inner diameters without supports. VELO3D has suggested that, with their technology, customers can create complex metal designs previously considered impossible due to the constraints of legacy AM technology.
The metal AM leader is also ready to deploy its new laser printing technology solution, called Sapphire XC, which is expected to ship in the fourth quarter of 2021. Designed as a scale-up of the original Sapphire solution, the new platform will support the production of parts that are up to five times higher in volume and up to three times lower cost than existing Sapphire technology. The company’s growth strategy has been focused on the specific products that only it can produce within a $100 billion total addressable market for high-value metal parts. Continuing along this growth path, VELO3D sees a huge incentive in the AM market, which is set to expand to $35 billion in 2030.
Up until now, company management had raised a total of $50.1 million in funding over four rounds. Their latest funding of $28 million was raised on April 28, 2020, from a Series D round, led by venture capital firm Piva Capital, which puts the company on a post-money valuation of between $100 million and $500 million, according to PrivCo. Through the deal, VELO3D will receive up to $345 million in proceeds from JAWS Spitfire’s cash in trust and a $155 million private placement of common stock at a $10.00 per share value. Upon completing the transaction, it is set to benefit from a flexible capital structure with approximately $470 million of cash on its balance sheet, net of debt, and assuming no redemptions are effected. The upcoming initial public offering (IPO) will help the company expand into new markets, invest in new technology, and become positioned to rapidly scale to meet customer demand.
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