»More mainstream in the U.S.«
by Thomas Masuch - 2019/12/29
Additive manufacturing is also becoming increasingly interesting for a large number of investors. For this reason, the »Wohlers Associates Investor Dinner Sponsored by Formnext« took place for the first time in Frankfurt on 20 November 2019. We talked with Terry Wohlers about the investment trends in additive manufacturing and the differences between the USA and Europe.
What do investors look like – are they banks, investments companies, industrial companies or others? And are there differences between the US and Europe?
WOHLERS: They span from institutional investors and individuals to private equity and venture capital. My sense is that investment capital in the U.S. is more mainstream and assessable than in Europe. If a company in the U.S. is seeking financing to support a good idea, it does not have to look long and hard to find an investor or to be found by one. This assumes that the company has something of good value to offer. In parts of Europe, finding investors is not as easy.
As the industry has developed, has the focus of investors also changed?
WOHLERS: A surprising number of investors interested in AM have strong knowledge of the subject. They may not be up to date on the most recent trends and developments, but they know what questions to ask. This was not the case 15 years ago. Today, many are shifting their investments from AM systems to AM applications. An example is SmileDirectClub, which was the largest AM-related investment ($380 million) last year.
Three relatively broad groups of investors
Where do you see the main possibilities for investment? Start-ups, SMEs, others?
WOHLERS: Three relatively broad groups of investors get involved in AM opportunities. One group invests predominately in publicly traded companies. They are mostly institutional investors, such as banks, hedge funds, and mutual funds. The second group is comprised mostly of venture capital and private equity. These investors usually receive a percentage of a privately held company in return for an investment. A third group is defined as seed and angel investment, mostly for small startup companies. Individuals are also investors and will help finance startups and buy shares of publicly traded companies. Some of the most interesting and popular investments in recent years have been around applications, software, and services. We see this trend continuing in the foreseeable future.
Do you agree in saying that the investment culture in the U.S. is a big advantage for local AM-start-ups?
WOHLERS: It is believed that investment dollars are easier to get in the U.S. than in many countries in Europe, including Germany. For a very long time, the U.S. has had a culture of high tech startup companies, with Silicon Valley being the best example. Over time, it has spread across most of the U.S., although not to the same degree in each state. If someone in the U.S. has a good idea, has developed it, and one or more good people are behind, money is often available to support it.
Dear Terry, thank you very much for the interesting interview.