Printing Money Live at AMS 2024: Riding the Financial Wave

In 3D printing, the ride has been anything but smooth. During a panel discussion at the Additive Manufacturing Strategies (AMS) 2024 event, industry insiders took a trip down memory lane, reminding us of the volatility that’s pretty much part of innovating in this space. But, of course, despite the financial roller coaster, 3D printing technology has advanced heavily from where it was a decade ago. It’s matured, but that doesn’t mean the money side of things has gotten any less bumpy.

For anyone who has been in this game for a while, 2014 was a year of growth and excitement for the 3D printing industry. However, it also brought to light several challenges, like market volatility, technological limitations, regulatory hurdles, and the gap between expectations and reality. That’s basically what nLIGHT Market Development Manager Alex Kingsbury talked about when she introduced the “Printing Money: M&A and Public Markets” panel on the second day of AMS 2024.

“If you think about where 3D printing was ten years ago, it is much more advanced, but yet we’re still getting this huge amount of volatility in the financial markets, and that does have an actual impact on our technology,” says Kingsbury. “Speaking of transition, we’ve gone through a global era of free money that has come to a big halting crash, which has had a lot of big ramifications.”

Panelists Danny Piper from NewCap Partners, Bryan Dow and Stephen Butkow from Cantor Fitzgerald, and AM Ventures’ Arno Held all rated their optimism about the future of 3D printing. On average, the mood was cautiously optimistic, with scores fluctuating between five and seven. The experts say that even though the tech is advancing and finding its way into more applications, it’s challenging to attract capital. Butkow remarked that the industry has seen its fair share of booms followed by some pretty harsh reality checks, and right now, attracting fresh capital is a tough sell.

Piper, who hosts the Printing Money podcast on 3DPrint.com with Kingsbury, was more pessimistic than his co-panelists. Expressing a cautious outlook on the 3D printing industry’s financial health and consolidation strategies, Piper says that while the tech has enormous potential, he still worries about how some companies’ balance sheets “are in dire straits” and whether it will be effective for companies to join forces “trying to emerge just to ensure against scale.”

Innovation meets reality

One hot topic was the mergers and acquisitions (M&A) arena, as companies are trying to find the right partner to weather the economic storm. In this context, Dow highlighted how important it is for these companies to merge and focus on profitability. He pointed out that cutting unnecessary spending, aligning costs with earnings, and ensuring profitability is necessary to attract serious investors and partners in these challenging times.

The discussion also turned to the investment landscape, where investors who previously showed quite a lot of enthusiasm have become more cautious. The experts attributed this shift to a period of overvaluation when company values reached unsustainable levels before showing a decline. As a result, venture capital has become more selective, with investors cautious due to the losses incurred during the previous downturn.

“If we rewind two years ago, we were just exiting out of 2021, which was a boom time for this sector and broader disruptive technologies,” said Dow. “Over $4 billion had been plowed into this industry and we had irrational exuberance to its finest. And I don’t think we could quite see clearly what was happening just because there was so much dislocated disruption, dislocation of the market, just capital coming in. So I think there was probably some irrational spending and some bad investments. Then there was a shakeout in the system, but I feel like this year things are looking up. And the reason I say that is because we’ve seen a lot of companies that have unfortunately cut costs, but I think everybody had overhired, overinvested in a time when there was a lot of capital. Now there’s no capital and I think people have rightsized their business.”

Alex Kingsbury moderates the “Printing Money” panel at AMS 2024. Image courtesy of 3DPrint.com.

Capital shifts

But it’s not all bad. Successful exits and strategic investments suggest that there’s still plenty to look forward to in 3D printing. Although everyone’s looking for the next big thing, the panelists stressed the importance of not just focusing on the technology and seeking to achieve end-to-end solutions but also being strategic business operators. Because at the end of the day, businesses need to turn a profit, said the experts. Take costs out, find out what’s not working, make yourself attractive, and then the capital will be found, explains Dow.

Ultimately, the panel suggests that innovative business models like “factory in a box” solutions, which could revolutionize the industry by centralizing technology and expertise, are key. However, while this concept holds promise, its success remains to be seen. Overall, the experts agree that the 3D printing sector is maturing, navigating its path towards profitability. Although the Industry experts displayed cautious optimism, they say experience and a readiness to tackle upcoming challenges with a hopeful yet pragmatic approach will be critical to future success.