AMS Spring 2023

Shapeways to List Via SPAC, Desktop Metal as Investor

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Desktop Metal, Velo3D, Rocket Lab, and Markforged are going the special purpose acquisition company (SPAC) route, while Rokit and Massivit are launching their own IPOs. Now Shapeways is to list via SPAC as well. The 3D printing service will have Lux Capital, Andreessen Horowitz, INKEF, and Union Square taking part in the PIPE deal. All in all, “$195 million of net proceeds to the Company, including a $75 million fully committed, common stock PIPE at $10.00 per share anchored by top-tier institutional investors Miller Value, XN, and strategic investor Desktop Metal.” This puts a $410 million pro forma enterprise value on Shapeways and possibly an equity value of $605 million. The SPAC vehicle is Galileo Acquisition Corp. (NYSE: GLEO) and it will be renamed SHPW.

“Our vision to enable anyone to rapidly transform digital designs to physical products is reaching a significant milestone today as we transition Shapeways into a public company. We have been successfully executing on our vision, and this capital will allow us to empower digital manufacturing at scale, accelerating Shapeways’ additive manufacturing capabilities while expanding the Company’s material and technology offerings to more markets and industries,” said Shapeways CEO Greg Kress.

I was Shapeways’ first employee, so, for me, this is a very nostalgic moment. They were heady days in 2008 and, with little sleep and a lot of hard work, we built something that, now so many years later, has become a public company. Going from a scrappy little industry to having multiple new listed firms in the first half of this year is a huge achievement for all of us. Congratulations to the current team and all past employees, as well.

Virtox’s Gyro on Shapeways.

The company notes that it has 3D printed some 21 million parts and delivered them to 1 million customers in more than 160 countries. To do so, it has used 11 different additive manufacturing technologies, along with over 90 materials and finishes. Shapeways also licenses a commercial software-as-a-service version of the software it uses in-house to some of its partners so that they can rely on the company’s manufacturing operating system inside their own enterprises.

Also interesting is the fact that Shapeways has signed a partnership deal with Desktop Metal, which the company describes as “an important expansion beyond Shapeways’ current focus on polymers.”

“Shapeways fits our mandate given its North American and European nexus, market leadership position, and growth profile. Our team, having decades of experience advising, investing and operating businesses across U.S. and European markets, was immediately attracted to Shapeways’ platform which is supported by its proprietary software capabilities and ability to provide solutions to any company,” said Luca Giacometti, CEO of Galileo said.

All in all this looks like a very good deal for existing Shapeways shareholders. With increased competition from the likes of Sandvik/Beamit, GKN and BASF large companies were starting to put their weight squarely behind becoming a 3D printing service. At the same time, through an active and aggressively growing well-funded Xometry and an acquisitive Protolabs, it was also besieged by similar services. Caught between companies with more scale and scope, large manufacturers, and the world’s largest chemicals-to-parts company would not be a happy place for anyone. Shapeways never really managed to connect with millions of consumers, but was a broadly used 3D printing service all the same. They would have needed massive funding to survive new waves of competition.

Bracelets by Shapeways designer mulderendevries

Now they have a breakthrough investment and are in a position to acquire new capital and new growth. This is a great exit for the people on the Shapeways side. In the long run, a publicly traded roll-up for 3D printing services is something almost written in the stars. If CEO Greg Kress can use his new funding to either win a play for consumers once again or, what seems more logical, go after the enterprise market, Shapeways could go from strength to strength. The attention will be on the firm now to perform and grow, however.

For Desktop Metal this is a masterstroke. Ric Fulop has used his fundraising prowess to help, essentially, a force-multiplier for his firm to go public. He has also indirectly been able to raise money that will be used to buy his machines. With Shapeways, possibly very grateful to Desktop Metal and partnering with it, the company could bring many new customers to Desktop Metal machines. By further commercializing its own technology via Shapeways, Desktop Metal also has a stake in a firm that has broad exposure to many different technologies and customers, so it should be able to learn a lot as well. If Desktop Metal’s technology works well in a service environment, this will be a huge boon to Shapeways and Desktop Metal. It also leaves Shapeways as a prime future merger candidate for Desktop Metal. It’s a beautiful play!

Consolidation in our industry is coming very fast and hard. Investment interest in 3D printing has also never been as high as it is now. Adoption of our technology is on the increase and the world will hear of us now.

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