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Two years after it was created, Desktop Metal, a 3D metal printing startup based in Burlington, Mass., is gearing up to take its first product into mass production. To do so, it’s gathered up a giant pile of venture capital from a group of noteworthy strategic investors.
The company has raised $45 million in new venture funding from the venture capital arms of Alphabet, BMW, and Lowe’s. The round values Desktop Metal at $305 million pre-money, up from its valuation of $100 million in April 2016. The company has now raised a total of $97 million. Other investors include NEA, Kleiner Perkins Caufield & Byers, Lux Capital, GE Ventures, Saudi Aramco, and Stratasys, a 3D printing company.
Ric Fulop, founder of A123 Systems and former general partner at North Bridge Venture Partners, created the company alongside four MIT professors: Ely Sachs, Chris Schuh, Yet Ming Chiang, and John Hart.
Fulop says this round of funding will allow the company to enter mass production. “Our vision is to change the way people make stuff,” he says. “It’s a big vision and it requires resources to scale it up.”
The 3D printing industry is frequently knocked for not living up to its early hype. Fulop concedes that is true in when it comes to plastic 3D printing and consumer-facing printers, but notes that industrial 3D printing has thrived and metal 3D printing is especially ripe for disruption. Fulop, who has backed SolidWorks and Dyn and OnShape, sees an opportunity to modernize and lower the cost of 3D metal printers, which can cost as much as $800,000 a pop. The market for these printers is growing 50% to 60% per year, he says. General Electric has a goal of building a $1 billion 3D printing business by 2020; last year it acquired Arcam, and it paid $599 million for Concept Laser.
Desktop Metal’s new investors are potential customers. BMW could use Desktop Metal’s printers for car parts, likewise Lowe’s for in-house products. Uwe Higgen, Managing Partner of BMW i Ventures, notes that working with Desktop Metal is part of the company’s plan to adopt additive manufacturing at BMW. “Desktop Metal is shaping the way cars will be imagined, designed and manufactured,” he says,
Fulop said he was not at liberty to share the reason for Alphabet’s interest (via GV, its venture capital arm), except that it was “crazy stuff.” Andy Wheeler, General Partner at GV, noted that Desktop Metal is shaping the “dynamic evolution” that shaping the additive manufacturing industry.
“The promise of 3d printing … is making things you couldn’t make any other way,” Fulop says. “Once you are able to reduce the cost and make it more accessible, it enables you to … speed up the product cycle.”