AMPOWER Publish Latest Insights Into Additive Manufacturing Funding Challenges
AMPOWER has published its latest Additive Manufacturing Insights report titled ‘Venture Capital in Additive Manufacturing’. AMPOWER Insights is based on a joint database of industry leaders in consulting and Venture Capital for Additive Manufacturing AMPOWER and AM Ventures. The market analysis was performed by AMPOWER and is based on approximately 3,000 startups in Additive Manufacturing. The full report is available for download.
In Additive Manufacturing (AM), rapid innovation and substantial funding were driving forces in the past decade. However, the industry is now navigating in a more challenging environment. The once-thriving ecosystem, characterized by significant investments and flourishing ventures, faces headwinds due to overpromised expectations leading to disappointment and subsequently, the subdued valuation of publicly traded companies in the sector.
The top three AM technology startups raised over EUR 1.2 billion in total funding before going public in a SPAC deal. Although their valuation at the time of the IPO in 2021/22 was at EUR 4.6 billion, it has sharply dropped to only EUR 0.5 billion today. One of the reasons behind this decline is the overestimation of the addressable market by the startups and their investors.
Another major obstacle is the adoption speed. Implementing a manufacturing technology is an intricate endeavor, particularly in the case of AM, which often involves not only a change in an existing manufacturing process but also the redesign of applications and new material specifications. The complexity and cost associated with changing all three factors have proven to be highly challenging and can take several years, while most startups assume high sales growth within a 5-year period.
Unsurprisingly, the US boasts the largest number of Additive Manufacturing startups, while Israel and the Netherlands lead in AM startups relative to their countries’ economic power. A surprising second in the Asia Pacific region after China and a newcomer in recent years is India, with over 166 AM startups listed. While the number of new AM technology startups annually has declined over the past decade, the number of new application-driven AM startups have steadily increased.
Additive Manufacturing enables new applications, and while established companies often struggle to fully embrace AM, startups are likely to take the risk associated with a completely AM-driven approach to manufacturing applications.
While startups are currently facing challenges in raising money, investors find attractive opportunities due to lower valuations. However, the number of startups with a truly new value proposition is lower than in the past. Overall, startups with a customer focus and application centric approaches are poised to have successful funding rounds in the next couple of years.
“Startups serve as the driving force behind innovation in Additive Manufacturing, continually challenging established manufacturing technologies. In recent years, there has been a notable transition from technology-focused startups to those emphasizing applications in Additive Manufacturing. This shift signifies a maturing industry with promising prospects. Investors now face the challenge of allocating budgets, deciding between high-potential application ventures and the select few truly groundbreaking AM processes that could enable a significant leap in productivity” comments Matthias Schmidt-Lehr Managing Partner at AMPOWER.
For more information: www.ampower.eu
