Formlabs sees China as one of the keys to expanding 3D printing technology’s role in manufacturing, and the Massachusetts-based startup plans to grow its business there with the help of a recent $30 million venture funding round and some new investors located in China.
Xconomy reported Formlabs’ latest investment in early April after spotting a document filed with federal securities regulators. Today, the Somerville, MA-based 3D printing company shared more details about the $30 million Series C funding round. The investment was led by previous backer Tyche Partners, and it includes contributions from China-based Shenzhen Capital Group and UpNorth Investment Limited, two new investors in Formlabs. Previous Formlabs backers DFJ, Pitango Venture Capital, and Foundry Group also invested in the Series C round, according to a Formlabs press release.
Formlabs has now hauled in $85 million in venture capital since it was founded in 2011 by three MIT Media Lab alums. The company develops and makes 3D printers, the software to run them, and a variety of plastic materials the printers use to churn out parts. Its flagship product is a desktop printer called Form 2. It also makes a larger and more expensive printer called Fuse 1, and a system called Form Cell that combines robotics, advanced design software, and a line of desktop printers to automate much of the printing process. Formlabs’ users include engineers, designers, and manufacturers spanning industries such as education, dentistry, healthcare, jewelry, and research, the company said.
The new cash will be invested in an expansion of Formlabs’ products, the company said. It didn’t offer much detail, but CEO and co-founder Max Lobovsky told Xconomy that research and development efforts will encompass printer hardware, software, and materials.
Formlabs is also adding to its Somerville campus with the opening of an 18,000-square-foot facility, the company said in the release. Meanwhile, it plans to grow its operations around the world to meet growing demand, particularly in Asia. Formlabs currently has more than 300 employees in the U.S., 100 in Europe, and a dozen employees in China and Japan, the company said.
Formlabs’ investors could help with the startup’s strategy in Asia. Tyche Partners is based in the Bay Area and has connections with investors and companies in China, according to its website. Shenzhen Capital Group is a venture capital firm founded by the government of the Chinese city of Shenzhen. UpNorth is based in Shanghai, China, Lobovsky said.
“For many years, China has been catching up in manufacturing capabilities to the U.S. and Europe, but recently it has matched or surpassed in many areas,” Lobovsky said in the press release. “Chinese manufacturers will be critical to figuring out how to adopt 3D printing into higher-volume manufacturing applications.”
That’s one of the broader goals of the 3D printing industry, which is seeing rising demand from businesses as well as engineering and design professionals. For years, the most feasible use for 3D printers has been making prototypes, but companies are increasingly using them to make finished, ready-to-use parts. For example, Formlabs’ printers can create custom dental retainers and splints, custom earbuds for headphones, props for films, and custom parts for factory machines, according to the company’s website.
In an e-mail exchange with Xconomy, Lobovsky provided some additional details about Formlabs’ growth and strategy in Asia. Here are some of the highlights:
Xconomy: What’s driving demand for 3D printing in China and other parts of Asia?
Max Lobovsky: Manufacturing, primarily. 3D printing adds a lot of value in manufacturing environments, whether it is in creating production line efficiencies by creating bespoke tooling or fixtures on the line, or printing direct end-use parts for highly customized pieces.
X: How might Chinese manufacturers help advance 3D printing?
ML: As one of the leaders in manufacturing, adoption in 3D printing use is just as important in China as in other regions. We have a strong U.S. and EU presence. This funding round marks a next step in our growth in the China and Asia markets.
X: Do tariffs and a possible trade war between the U.S. and China threaten Formlabs’ business in that country?
ML: Yes, the tariffs pose a risk. We manufacture different products in many places around the globe; in the U.S., China, and Europe—shipping globally. This is done largely because of free trade. We may become much more constrained on where we can manufacture and sell if a trade war does break out.
Regardless of a trade war, China will remain a large market for 3D printing. According to [a] Wohlers Report, it’s the second-largest market for 3D printing, after the U.S.
X: Was there any hesitation to raise money from Chinese investors, given the current political and regulatory environment?
ML: It was definitely a consideration, but when we met the investors involved and learned from past Chinese investments in U.S. companies, we became convinced this would only be a positive thing.
