Funding for China’s 3D Printing Sector Grows Amid Global Uncertainty

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As things return to a state of semi-normalcy from COVID-19, we are experiencing a contraction in market liquidity. We witnessed excessive currency issuance during the pandemic and several SPAC mergers and listing cases during this period, but now it has resulted in an increasingly volatile financial climate after the Federal Reserve raised interest rates and tightened control over the currency.

Tech ventures worldwide, including those within the additive manufacturing (AM) sector, are particularly feeling the effects of this instability. Notably impacted are those companies that are yet to turn a profit. It’s an environment that pressures investors to either seek a quick exit from their portfolio companies or push them for faster cash generation.

The current state of the economy is experiencing a cyclical downturn, which could lead to a recovery for tech startups in the future. However, the timing of this rebound remains uncertain due to the challenging macro environment. Unfortunately, global funding for the AM sector is struggling to grow in these difficult times. According to Vanesa Listek’s article, “AM Funding Has Fallen to Pre-Pandemic Levels,” investment deals for 3D printing startups have decreased, following a trend of reduced global funding. The data from 3DPrint.com further confirms this, revealing that international AM funding has plummeted by a staggering 79% in the first four months of this year compared to the same period last year.

Chinese AM Funding Continues Amid Market Liquidity Contraction.

Despite the globally observed trend, witnessing sustained growth in AM funding within China is astounding. In 2022, the total financing of China’s AM industry reached about 6.4 billion CNY (USD 896 million), marking an increase of 33% from 4.8 billion CNY (USD 672 million) in 2021. Several 3D printing companies have recently been valued at over 1 billion CNY (USD 140 million) due to a significant rise in financing cases that exceed 100 million CNY.

Against a sharp weakening of investment activities in e-commerce, entertainment, and other fields, more and more Chinese investment institutions have begun to bet on hard technology tracks such as new energy and 3D printing. The strong support of national policy direction has put 3D printing in the spotlight of investment institutions.

While IPO cases in the global AM market dropped sharply, the Chinese market continued to express confidence in the sector, demonstrated through multiple IPOs. After a successful initial public offering, Farsoon Technologies made its highly anticipated debut on the Shanghai Stock Exchange on April 17, 2023. Meanwhile, Shanghai Uniontech Technology completed IPO listing, counseling, and filing, and the metal 3D printing company Xin Jinghe completed a pre-IPO round of nearly 500 million CNY (USD 70 million) in financing.

Several Chinese companies show their unwavering commitment to the AM sector by embarking on strategic fundraising endeavors for AM advancements. Recently, Gree Financial Holdings, a subsidiary of Gree Group, collaborated with Sina Technology, a key player in the domestic printer and printing consumables industry chain, to launch a printing industry fund worth 800 million CNY (USD 112 million) in May 2023. At the same time, Nanjixiong, a well-known AM portal in China, has ambitious plans to co-establish a dedicated 3D printing industry fund with Shanghai Dunhong Asset Management Co., Ltd. Their vision is to accelerate the growth of emerging 3D printing startups in China, cementing the nation’s position as a global leader in the 3D printing arena.

Data Source: Nanjixiong. Note: Currency values have been independently converted to USD

 

AM Funding in 2023 

How does 2023 compare to the previous year for AM startup funding in China? From my research on publicly announced AM investment deals in China, the sector has shown robust growth this year. I estimate Chinese ventures have already secured 4.7 billion CNY (USD 658 million) in funding up to now, suggesting that, given the current pace, the sector could reach an annual funding amount of 8 billion CNY (USD 1.12 billion) this year.

An overview of AM startups that closed VC funding this year reveals a broad spectrum within the 3D printing and related technology sectors:

Core 3D Printing Technology

Several businesses are dedicated to advancing 3D printing technologies tailored for diverse industries, with some even pioneering arc AM processes with multiple applications. Others are known for producing industrial-grade 3D printers, both FFF and metal-based, and some even specialize in hybrid 3D printing, which merges 3D printing with precision metal thermoforming.

Material Production

Many of these companies delve into the intricate world of materials, specializing in the research, development, and production of 3D printing feedstocks. This includes metal 3D printing powder manufacturers and providers of advanced AM resins, spanning basic, functional, and dental series.

Aerospace & Advanced Applications

A few businesses focus on the aerospace sector, emphasizing the research, development, and production of structural aerospace parts. This also includes a private domestic aerospace company.

Dental Applications

The dental industry also finds representation with companies specializing in the digital transformation of the entire dental process.

Comprehensive Solutions & Services

Several entities provide holistic 3D printing solutions, encompassing equipment, materials, and processing services. This category also includes a global leader in 3D camera technology and an integrated circuit and system additive manufacturer.

Announcement Date

Company Name (English)Company Name (Chinese)StageFunding SizeInvestors
27. Jul. 23Beijing Sandi Technology Co., Ltd. (3DPTEK)三帝科技Series COver 100 million yuanZhongke Haichuang, Chengwei Capital
18. Jul. 23Wellari威拉里Series ACN¥100,000,000
18. Jul. 23Enigma英尼格玛Series A+Tens of millions of yuanDinghui Baifu, Tianwen Times, Zhenyuan Capital
17. Jul. 23Jiangsu Vilory Advanced Materials Technology Co., Ltd.江苏威拉里公司Series ANearly 100 million yuanNot mentioned
3. Jul. 23MeiMai Technology美迈科技AngelTens of millions of yuanZhejiang Chizi Equity Investment Fund Management Co., Ltd.
11. Jun. 23Boston Micron Fabrication摩方精密Series D1.6 billion yuanNational Manufacturing Transformation and Upgrade Fund Co., Ltd., Shanghai Guotai Junan Innovation Equity Investment Mother Fund Center, Shanghai Zhangjiang Science and Technology Venture Investment Co., Ltd., Chongqing Jianxin Heying Private Equity Investment Fund Partnership, Chongqing Yufu Fund
25. May. 23Eplus3D易加三维Series BHundreds of millions of yuanSDIC Unity Capital, Air Development Fund, CITIC Securities, General Technology Venture Capital
10. May. 23INTAMSYS远铸智能Series BCN¥100,000,000CMB International Capital Corporation, Forebright Capital, Porsche Ventures
4. May. 23Revopoint知象光电A new round of strategic financingNot specifiedHaitong Innovation Private Equity Fund Management Co., Ltd. (海通创新)
21. Apr. 23RayshapeSeries ANot specified
18. Apr. 23CHAMPION铖联科技Series B236 million yuan3H Health Investment, Vertex Ventures China, Zhencheng Capital
4. Apr. 23Ningbo Ingenuity宁波匠心SeedNot specifiedCaozhixing Venture Capital
1. Apr. 23enovate3DCorporate RoundNot specifiedMaxscend Technologies
27. Feb. 23CP Nano (Greem Exhibition Technology)绿展科技Series ATens of millions of yuanGuozhong Capital, Foshan Nanhai Industry Investment, Foshan Guicheng Technology Equity, Haiyang Venture Capital, Danyang Deep Sea Investment Fund
20. Jan. 23Yizhi TechnologyVenture – Series UnknownNot specified
16. Jan. 23Galactic Energy星河动力Series B/B+1.27 billion yuan

Not specified

 

Conclusion

China’s AM sector stands as a beacon of resilience and innovation in a global landscape marred by financial volatility and a downturn in tech funding. While the world grapples with shrinking market liquidity and a staggering 79% drop in global AM funding, China’s AM industry continues to thrive, reflecting a 33% growth in 2022 and promising prospects for 2023.

This remarkable success can be attributed to a confluence of factors. Strategic collaborations for investment, such as the partnership between Gree Financial Holdings and Sina Technology, and ambitious plans by companies like Nanjixiong underscore China’s unwavering commitment to AM. The nation’s focus on hard technology tracks, bolstered by solid national policy support, has placed 3D printing at the forefront of investment opportunities.

Moreover, the diversity and innovation within China’s AM startups, ranging from 3D printing hardware to specialized applications in aerospace and dental industries, reflect a vibrant and evolving ecosystem. The continued confidence in the sector, as demonstrated through multiple IPOs and substantial financing, further cemented China’s position as one of the leading global countries in the 3D printing arena.

In the face of global economic challenges, China’s AM sector’s sustained growth is not just a testament to the resilience of its market but also a hopeful sign for the future of technology and innovation. It’s a compelling narrative that offers valuable insights and inspiration for investors, policymakers, and industry leaders worldwide, highlighting the potential of strategic investment, collaboration, and innovation in driving growth even in the most challenging times.

Please note that there may be potential discrepancies in the translation of company names from Chinese to English and in the investment amount in this article.

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