The TV show 90 Day Fiancé is built on the concept that couples with a K1 visa have 90 days to spend together in the U.S. before deciding whether to marry. The show’s drama is fueled by the time pressure and cultural differences experienced by these couples. Interestingly, over ten seasons, the show has witnessed a mix of successful marriages and numerous divorces. This scenario mirrors the pressure cooker environment the additive manufacturing (AM) industry has been in for the past decade. Much like the show’s participants, we’ve operated under the notion that every second is critical. However, we’re now transitioning from this speed-dating-like phase to a period where we must generate our own revenue. While the immediate pressure to strike deals may have lessened, the urgency to perform in the market is now more intense than ever.
At the same time, the general view is this one, expressed by 3D Systems CEO Jeff Graves:
“Industry-leading manufacturers are increasingly recognizing that AM allows them to take control of their supply chains through local manufacturing. This shift helps in reducing costs by minimizing the number of suppliers and eliminating the need for costly logistics providers to move components across different geographies. Additionally, this approach has the potential to positively impact the environment by reducing manufacturers’ carbon footprints.”
The broader trend propelling our growth is an increasing interest in resilience, environmental considerations, and flexibility. Meanwhile, industries such as industrial, medical, new space, and defense are rapidly expanding. These sectors all benefit from customization, high mix low volume production, enhanced geometries, and faster time-to-market. In light of this, we should focus on discovering new applications, penetrating fresh markets, and enhancing our offerings to gain more traction.
¨In 2024, we expect that the industrialization of AM processes, especially for metal AM will continue to grow and expand in a big way. In the last couple of years, we have been seeing big growth in industries such as space and aviation, today we are seeing as well, steady growth in the medical, dental, tooling and automotive industries. As we have begun to see already this year, consolidation in the AM industry is happening. We believe that this will continue in 2024 with the AM industry maturing. Additive Manufacturing OEMS must offer complete solutions to the end customer in order to further quicken the pace of adoption. We expect further innovation in the manipulation of the laser beam during the powder bed fusion process. Sustainability is one of the driving forces in our product development. It is heartening to see that quite a few organisations within the AM industry do take it seriously as well.¨
Marcus Pont, CEO of aerospace and automotive actuation company Domin, told us:
“I think next year, we’ll see the change from people investing billions in creating solutions and hoping to find problems, to a world where people search for problems and realize that 3D printing can be a solution. This will lead to the creation of new companies focused on creating value through applications, and potentially to the consolidation of processes where we will see the long-term stable processes win out.”
From this perspective, it seems we’ve been approaching the problem in reverse order. Instead of creating a car, and then hoping for the development of uses like pizza delivery or taxis, we should first identify real pain points and business opportunities, and then develop solutions that match. For instance, if I produce magnets, I could simply focus on manufacturing them cost-effectively, trusting that applications will emerge, given the general demand for magnetism. Conversely, building a complete factory without a clear idea of what it will produce is likely to be suboptimal and may not function effectively. At the same time, I completely concur with the notion that “long-term stable processes win out” in determining the success of such endeavors.
AM Ventures Managing Partner Arno Held believes that,
“2024 will be an exciting year for many startups. Having avoided valuation discussions in priced rounds for over 12 months and loaded up with convertible loans, many companies could face challenging discussions and hefty dilution in the coming year. On a more positive note, I expect to see more serial applications being published and many former mainstream funds turning towards advanced manufacturing, which will have a positive impact on the investment climate in our industry.”
Considering this information, some magnet companies may currently find themselves in a particularly challenging situation. Securing finance could be more difficult than usual, and their vision-led approach may face added hurdles under current conditions. Additionally, these circumstances are likely to result in difficult discussions between existing and new shareholders.
Desktop Metal CEO Ric Fulop believes:
“2023 was one of the most challenging years to date in additive manufacturing, marking the first year of meaningful contraction since 2008-2009. At its core, industrial AM is a capex-intensive business and, as such, it’s cyclical to interest rates. When we entered 2023, we didn’t anticipate the industry shrinking, but in hindsight, this was a result of the sharp rate increases that began in 2022. For 2024, the market expects rates to start decreasing, and as long as we don’t enter a recession, our market should begin to experience tailwinds and, at the very least, remain flat or start to grow again. We are also looking forward to profitable growth; we began a difficult and concerted effort 18 months ago to become profitable, and we are excited to finally cross that threshold.”
Here, Ric attributes our growth not to overarching trends or defense sectors, but to more routine factors such as interest rates. However, there’s been growing concern about Desktop Metal’s performance lately. If Ric can steer Desktop Metal to profitability, it would indeed be a significant achievement. Summing it all up, we’re facing financial challenges: reduced funding, investor relations issues, but we’re left with no choice other than to achieve profitability and explore new applications. The next 12 months are likely to be uncomfortable for us. I anticipate they will be the most difficult in our history. Yet, if we can successfully navigate this period, we are poised for long-term, stable growth.
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