The firm’s groundbreaking metal 3D printing process is capable of creating components for customers in industries such as automotive and robotics quicker than rival methods. This significant competitive advantage – and the fact that, by using Desktop Metal’s equipment, manufacturers have a much greater ability to develop and iterate new products – means the company has this year been able to raise substantial amounts of extra capital from its corporate venturing backers.
In February, Desktop Metal’s series C round raised $45m from investors such as BMW i Ventures, Lowe’s Ventures, GE Ventures and GV, the Alphabet corporate venturing subsidiary formerly known as Google Ventures. This valued the company at around $350m, and took Desktop Metal’s total fundraising at that point to just under $100m.
Since then, however, the company has raised a further $115m in a series D round in July, leading to reports – so far unconfirmed by Desktop Metal itself —that the business is now worth more than $1bn.
At the time of the series C round, Andy Wheeler, GV general partner, said: “The additive manufacturing industry is going through a dynamic evolution, and Desktop Metal is helping to shape that.
“The company has an impressive product vision, a proven team, and the right level of deep technical experience to bring the promise of metal 3D printing to life.”
Desktop Metal was set up in 2015 by a team of metallurgy specialists from the Massachusetts Institute of Technology, led by CEO Ric Fulop, a serial entrepreneur. He said the company’s fundraising in 2017 would enable it to increase its speed to market, while also expanding its sales programs and helping to boost advanced R&D efforts.
“We are on the brink of an exciting transformation in how metal parts will be designed, prototyped and ultimately mass-produced,” he added. “This latest funding puts us in an ideal position to ship our studio system in the coming months and our production system in 2018, while also enabling us to grow our company globally.
“The continued support of our investors underscores the power of our metal 3D printing solutions to help engineers and manufacturers, for the first time, apply metal 3D printing for the entire product development lifecycle – from prototyping to cost-effectively mass-producing complex metal parts.”
Desktop Metal’s Studio System was launched in spring 2017. This is an “office-friendly” metal 3D printing system designed to help customers with rapid prototyping. The Production System, which was also introduced earlier this year, is intended to manufacture high-resolution 3D metal parts at scale.
In June, the firm was selected by the World Economic Forum as one of its Technology Pioneers for 2017. Fulvia Montresor, head of technology pioneers at the organisation, said: “Desktop Metal has made great strides in increasing the speed, range of materials and accessibility of metal 3D printing. It has the potential to greatly impact product innovation, customisation and invention.”
Steve Taub, managing director of GE Ventures, first worked with Fulop a decade ago, when GE Capital invested in battery manufacturer A123 Systems, which Fulop helped to set up before its initial public offering and eventual acquisition by China-based Wanxiang.
“By the time A123 went public in 2009, we were their largest investor,” Taub said. “We kept in touch with Ric, and when he decided to start Desktop Metal, GE was very interested in manufacturing, especially with metals.
“My initial impression was that, if the company could achieve what they were setting out to do, it would be pretty great. So, when the time was right in their series B round, we made an investment – and we have followed on since then.”
As well as a great idea, Taub said, Desktop Metal boasts a very strong team. “As a venture investor, that is one of the key things you look for. The team will decide what is the best market to go after, how to go after it, and how to make the technology work.
“Desktop Metal has been successful because they have a fantastically talented technical team who have come up with a product that works really well and which is usable. They have made something hard relatively easy.”
Taub added that what the company was doing was a classic example of disruptive technology. “It may well turn out to be disruptive to the technology we use today, so it is something that GE wants to be associated with and have a stake in.”
Stephen Young, manager at Lowe’s Ventures, the corporate venturing unit of the US home-improvement retailer, said his company’s involvement with Desktop Metal had opened its eyes to new market possibilities. “If you look at the other investment partners, there are a lot of corporates who you would not be surprised to see,” he said. “But we were the first from the consumer side. We approached them and said: ‘What are you thinking about? Perhaps we can do this stuff together.’ They had chatted with these big manufacturers and industrial guys, so it caught them off guard when a retailer wanted to talk to them.”
Young said the partnership with Desktop Metal could offer significant benefits to Lowe’s, both now and in the future. “In the short term, this technology might help us to custom replicate an old cast-iron doorknob for a customer, for example. But it is also helping us to think strategically about what this kind of innovation could do in the long term and how that could affect our business.”