State of Funding in 3D Printing: Arno Held of AM Ventures

Our collection on the state of funding within the 3D printing trade continues with an organization uniquely positioned to grasp the dynamics of the additive manufacturing funding panorama. I spoke with Arno Held, Managing Associate at Bavaria-based VC agency AM Ventures.

AM Ventures’ roster of portfolio firms now stands at 20, with a fund of EUR100M raised to again industrial 3D printing ventures. In whole 40 investments have been made, with some portfolio enterprises receiving a number of funding rounds. Investments embody, DyeMansion, Conflux Expertise, and Lithoz. Whereas AM Ventures portfolio spans the globe, it’s attention-grabbing to notice that state capital Munich lately overtook Berlin when it comes to startup fundraising for 2024. Maybe the “California of Europe” imaginative and prescient of Minister-President of Bavaria Markus Söder for the area is nearing nearer?

Throughout a dialog with the investing shot-caller and steward, the overarching narrative is obvious: additive manufacturing has moved from a hype cycle to a extra grounded, methodical development part. The shift from “fund-anything-hardware” to a extra disciplined strategy underscores the maturing of the additive manufacturing (AM) ecosystem, forcing firms to reveal real-world viability. Tightened circumstances previously 18+ months have pressured many startups to pivot, search emergency capital, or restructure. But, Held sees indicators of renewed confidence by 2025. A “post-reset” panorama means that stronger firms, those who survived the downturn, are poised for wholesome development. This timing may supply traders alternatives at extra rational valuations.

Learn extra in our State of Investing in 3D Printing collection.

Investing in industrial 3D printing

AM Ventures was based virtually precisely a decade in the past, in February 2015; since then, traders have shifted their consideration to start-ups able to demonstrating tangible outcomes. “We are likely to look extra into extra mature companies which have delivered extra proof factors than simply ten pages of Excel and ten pages of PowerPoint,” says Held. Years in the past, almost something “that seemed and smelled and appeared like a 3D printer” might safe funding, he observes. As we speak, backers insist on a extra substantial monitor document; ideally, proof of repeatability, high quality output, and a concrete buyer base. “Once I initially closed the fund in 2021, I believed that will be the comfortable finish,” says Held. “Then I spotted that’s when the work actually begins.” 

This threat aversion has tightened due diligence necessities, with many funds now not content material to spend money on unproven {hardware} ideas. Held’s workforce more and more expects an industrial associate, secure processes, and measurable manufacturing benefits. On the identical time, alternative pipelines have expanded. Founders now steadily submit enterprise plans immediately through the AM Ventures web site, illustrating the model’s prominence. A worldwide community of conferences, educational companions, and portfolio corporations regularly feeds new leads, whereas company board participation permits insiders like Held to trace rising buyer calls for.

Regional challenges persist. Asia’s share of rising firms in additive manufacturing is rising, but traders based mostly in Europe or america wrestle to guage groups in unfamiliar markets. The complexity of assessing overseas entrepreneurs’ capabilities and intentions creates uncertainty. Held says it’s nonetheless “extraordinarily troublesome” for Western traders to guage these alternatives early.

Knowledge limitations additionally hinder strategic decision-making. Whereas public boards, trade gatherings, and company relationships assist establish recent candidates, a lot experience stays hidden inside giant organizations. Held cites a German saying: “If Siemens knew what Siemens is aware of.” The implication is that whereas deep technical data is scattered throughout the sector, few have discovered a scientific means to unearth it. With out direct perception, traders depend on partial data, intuition, and a community of trusted contacts, reinforcing the shift towards start-ups that may clearly show their value.

Additive manufacturing startups want stronger inner competencies, such because the early hiring of a CFO to make sure sound monetary navigation. Groups should additionally present maturity, foresight, and a willingness to interact with difficult “what-if” situations. Not each entrepreneur ought to tackle enterprise capital; alignment between founders and traders is essential.

The funding horizon spans years, with {hardware} sometimes requiring six years from R&D to dependable commercialization. Software program, in addition to application-focused ventures, can obtain progress extra rapidly, doubtlessly in a timeframe half of that for {hardware}.

Funding Tendencies in Additive Manufacturing

Market circumstances have tightened, however latest indicators level to renewed optimism by 2025, as each trade adoption and investor sentiment enhance.

Many companies are shifting methods to stay viable. AM Ventures’ Managing Associate, describes the state of affairs as “an attention-grabbing cut-off date to be a longtime enterprise capital investor in additive manufacturing,” given the “quantity of emergency calls” coming in from firms struggling to safe new capital. One portfolio agency lately raised $5 million however solely after enduring round 200 conferences with potential backers, a course of Held describes as having consumed essential assets for months.

Current knowledge shared by AM Ventures signifies a contraction in late-stage funding. The variety of such rounds throughout the additive manufacturing sector seems to have fallen sharply, dropping from 142 noticed late-stage rounds in 2021 to solely 17 offers in 2023. Regardless of these figures, some renewed indicators of exercise have emerged. Whereas the primary half of 2024 the 12 months supplied little respite, Held says, “Q3 felt a bit of bit just like the turnaround level.”

Within the broader German market, startups raised EUR 7.4 billion in 2024 based on KfW analysis, with a complete of 144 exits. 

In response to Held, metal-based additive manufacturing companies have begun to reveal stronger fundamentals and entice higher investor confidence than their polymer-focused counterparts. Demand seems significantly strong in power, transport, and infrastructure segments. Electrification, encompassing mobility on roads, rails, and within the air, together with oil and gasoline, now ranks among the many key development drivers for these applied sciences.

General, early-stage traders have grown extra selective, usually anticipating founders to point out a monitor document of scaling revenues past preliminary prototypes. Collection B rounds, sometimes properly into an organization’s business improvement, have turn out to be more and more uncommon. But this market reorientation additionally means that stronger firms in a position to reveal real manufacturing breakthroughs might in the end emerge more healthy from a interval of protracted capital shortage.

Some traders have begun to acknowledge that previous forecasts for additive manufacturing had been overly optimistic. “Additive manufacturing can not resolve the entire issues. It’s not the last word weapon for all the things.” Early exuberance led to aggressive fundraising and lofty firm valuations, some reaching income multiples within the lots of. A main instance was the general public itemizing of Desktop Metallic, which Held cites as having gone public at a valuation of round $5 billion on revenues of roughly $25 million, creating 200x income multiples.

Capital as soon as flowed abundantly into hardware-centric ventures, usually pushed by traders with a background in software program. Held notes that these backers assumed startups would scale as rapidly as digital platforms. When the market confronted the sensible challenges of scaling manufacturing applied sciences, expectations started to reset quickly. Held observes that whereas capital deployment turned tougher total, “the amplitudes in america are a lot, way more dramatic, so the highs are a lot increased and the lows are a lot decrease, whereas in Europe, it’s a bit milder.” Dry powder (uninvested funds) stays, but traders now appear extra cautious, rethinking valuations and specializing in enterprise fundamentals as an alternative of inflated development projections.

Selecting the winners: get your 3D printing start-up funded

AM Ventures’ focus has more and more shifted from generic {hardware} ideas towards ventures backed by stable operational constructions. “If a workforce has outlined not solely how they work collectively sooner or later, but additionally what occurs in the event that they separate methods,” says Held, “it’s an excellent indication that they’re professionals.” 

The folks behind any start-up are paramount to an funding resolution. Funding a workforce of latest graduates usually entails ready a number of years for know-how to succeed in market maturity. In distinction, older entrepreneurs, or “trade silverbacks” with sectoral experience, could also be anticipated to safe early earnings via area of interest merchandise after which replicate success iteratively.

A decade of expertise has sharpened the standards for evaluating funding pitches. Crimson flags embody an absence of preparation, extreme spending, for instance on authorized counsel, at too early a stage, and displays that reintroduce elementary ideas, such because the workings of FDM printing, to a seasoned investor already immersed within the know-how. Finally, the pitch deck serves as a proxy for a way founders suppose and set up their priorities relatively than as a definitive plan. “A pitch deck is out of date in the intervening time of funding,” Held remarks. “It’s about understanding how these folks construction their world.” Early conversations are designed to check whether or not entrepreneurs will react constructively to setbacks and preserve the resilience essential for sustained development.

The analysis course of entails mapping whole addressable market dimension (TAM), serviceable market segments, and defining a path from a distinct segment foothold to broader adoption. In the meantime, IP filings, market adoption charges, and buyer suggestions assist validate product relevance. Begin-ups leveraging standardized equipment, supplies, and software program—significantly in well-defined software areas—are thought of primed for revenue technology. This strategy displays traders’ choice for robust fundamentals over untested concepts, steering capital towards groups able to handle the monetary and operational calls for of sustainable development.

The emphasis now’s on a affected person, knowledge-driven mannequin that prioritizes confirmed experience and strategic partnerships over unrealistic pledges of in a single day breakthroughs.

Consolidation and Alternatives on the horizon

Synthetic intelligence, significantly in parameter improvement, supplies qualification, and high quality assurance, is seen as a strong enabler of productiveness and innovation. The trail ahead entails integrating additive manufacturing into established manufacturing chains, leveraging exterior partnerships, and sustaining sensible valuations and development expectations.

Wanting forward, the agency sees causes for cautious optimism. After greater than 18 months of subdued exercise, 2025 could carry renewed confidence. Held attributes this to bettering circumstances in core verticals and rising recognition that additive manufacturing, built-in into established worth chains, can ship sustained advantages. 

“There are some actually good indicators that AM has been adopted by varied verticals,” Held notes, predicting that the easing of latest uncertainties, significantly these cited in US markets, could immediate secure development. He means that for these already invested, and for newcomers to the sector, 2025 might current a possibility to safe pursuits in promising firms at rational valuations, with sensible timelines and strong operational methods.

A perennial query of continued relevance is whether or not the 3D printing trade is consolidating. “2025 can be an thrilling 12 months for the AM trade. It began with numerous turmoil and incumbents specializing in themselves and checking out their inner points,” says Held. “I’m assured that this 12 months, we will even see the mud settling and excessive ranges of consolidation exercise to occur within the second half of the 12 months. In distinction to horizontal diversification methods of the previous, we are going to see way more vertical integration via application-specific acquisitions.”

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The featured picture reveals Formnext Frankfurt. Picture by Michael Petch.