Inside the $5M Shapeways Deal that Never Happened

As Shapeways (Nasdaq: SHPW) headed toward bankruptcy, there were red flags for observers. In addition to the dropping stock price, the company’s regular financial reports showed numerous signs of a financial collapse. According to the company’s bankruptcy filing, Shapeways was looking for potential buyers. However, one source, MyMiniFactory Co-CEO Alexander Ziff, claims that Shapeways management essentially laughed off Ziff’s bid to acquire the firm.

Financial Inconsistencies and Missed Opportunities

MyMiniFactory, a popular 3D printables site, particularly for tabletop gamers and other hobbyists, has a good deal of overlap with users of Shapeways’ online 3D printing marketplace. While Shapeways operated industrial equipment to produce its goods, MyMiniFactory subsidiary 3DC relies on lower cost 3D printers to do so. Though they address some of the same market in different ways, there was enough synergy for Ziff and his firm to make a bid for the pioneering service bureau.

In an interview with 3DPrint.com, Ziff noted that MyMiniFactory identified potential financial issues at Shapeways over a year ago. Noticing that Shapeways had more cash than its valuation, his company saw an opportunity.

“We could tell a year ago that there was an issue with Shapeways. The share price of cash in the bank didn’t make sense. We thought that it was an opportunity for us to reach out to try and acquire the business,” Ziff explained.

To purchase the Shapeways URL and marketplace, MyMiniFactory offered the company approximately $5 million in cash and shares. However, the team’s initial offer was dismissed by Shapeways’ CEO Greg Kress. Ziff described the reaction: “We put an offer in, Greg laughed at us—just completely looked down at us as though we were some small, irrelevant company from England.”

As MyMiniFactory gained access to Shapeways’ data room, Ziff’s team uncovered several inconsistencies, according to the executive. “We asked simple questions like, ‘why do your employees on two different sheets not match up? Why does your machinery not match up? It just seemed fishier as we got along,” Ziff said. These discrepancies raised suspicions about Shapeways’ financial health and management practices.

The MyMiniFactory Co-CEO also suggested that the company’s technical operations were questionable. Rather than producing the goods most associated with Shapeways’ marketplace, Ziff encountered more adult goods.

“We kind of did get a tour and all we could see was sex toys being made, honestly,” Ziff said. “We got told by Greg that jewelry, miniatures, and trains, all the big things were what Shapeways was doing. We didn’t see any of that when we had a talk. It was—I don’t know how to put it—it’s sad because Shapeways has been here since 3D printing was more for the creators and that’s what their ambition was.”

In an effort to manage mounting financial pressures, Shapeways announced a significant online auction of Desktop Metal’s hardware valued at $5 million this April. The auction, conducted by Heritage Global Partners (HGP) on February 26-27, 2024, followed a previous $4 million auction held in October 2023. Key items in the auction included Desktop Metal P1 Production System 3D printers, Shop System binder jet 3D printers, BMD 3D printers, and various supporting hardware, highlighting Shapeways’ attempt to liquidate non-essential assets to improve its financial situation.

Ziff expressed disappointment in Shapeways’ financial decisions, particularly their investment in equipment that went unused. “They spent $30 million on Desktop Metal machines that never got touched and then they were selling them for nothing. Could you imagine what they could have done with that $30 million or what we could do with $1 million? It’s crazy,” Ziff remarked.

Looking Forward

As Shapeways navigates its bankruptcy, Ziff sees an opportunity for MyMiniFactory to step in and support the creator community that Shapeways once served. Despite the challenges and the way MyMiniFactory was treated, Ziff remains optimistic about the future and committed to the company’s mission. “We just wanted the domain name, we just wanted the marketplace… We didn’t need your facilities. Of course, SLS is interesting for us. That’s where Shapeways has done well,” he concluded.

Ziff emphasized MyMiniFactory’s dedication to empowering creators, contrasting it with Shapeways’ approach. “The point is we’re here to support the creators. We were put down by Shapeways. We always said in our message to them that we believe we are here as a guidance to help creators. We want to support the creator economy,” he said.

3DPrint.com reached out to Shapeways management regarding the story and will update the article per a response.