Market Overview

Investing in Innovations: A Look At Investment In 3D Printing


2013 has clearly been the year of 3D printing with public awareness reaching an all-time high and if you’re yet to pay attention to this technology then it’s clearly time to gear up. As you go further through the post, we’ll inform you more about its amazing rise as well as trends to dominate in the year 2014. But let’s see why 3D printing has gained such mileage as far as investment in innovations is concerned.

3D Printing: A Basic Understanding

What is 3D Printing? 3D is 3 dimensional—something that has width, depth and height. We move around 3D every day since our physical environment itself is 3 dimensional. While a traditional 2-D video has height and width but is technically devoid of depth, a 3D video adds another dimension to the stereotypic 2D images. Here, you’re presented with two separate visions being shown simultaneously (one image for one eye).

Why Is It is Considered to be such a huge Business?

3D, till date, is considered to be one of the most cutting-edge technologies, witnessed by the world. As per reports, Hewlett-Packard (NYSE: HPQ), at present sells their DesignJet Color 3D printer for about $20,000. The fact that it is a booming business and can soon have a major role to play in providing the much-needed boost to the presently languishing economy, remains unquestionable at the present. With the further development in technology, consumers would have access to more affordable options. A. Michael Berman, the chief technology officer for the Art Center College of Design, has to say: "When laser printers cost more than $5,000, nobody knew they needed desktop publishing.. The market for 3-D printing isn't as big as for laser printers, but I do believe that it is huge”

2014: Investment Opportunities in Innovations Heading for a Change?

Investors however believe that 2014 is going to mark a significant change in the field of 3D printing and investment opportunities would get more complex and trickier. As per a recently conducted research by Canaccord Genuity, there would be 3 key factors driving individuals, who are interested in investing in 3D printing: deviating service bureau business models, supply chain complexity and metal printing processes. Stratasys and 3D Systems are the 3D printing giants, who’re in focus now.

As far as 3D printing service bureaus are concerned, Canaccord opines that the larger undertakings might have their own IPOs: “Originally focused on SLA and later FDM machines used in the prototyping process, service bureaus have evolved to include metal capable DMLS machines and other processes. They also can go beyond printing jobs for customers to help in process and materials selection, and non-AM conventional manufacturing steps. Thus far, the only exposure to publicly traded service bureaus has come from the fact that DDD and SSYS each have significantly large service bureau revenue streams, through Quickparts and Redeye, respectively. We expect that to change in 2014 with the potential IPOs of pure play service bureaus.”

In the context of supply chain, Canaccord Genuity noted:

“We note that DDD historically traded at a 10-20% discount to SSYS. That discount was not only erased in 2013, it flipped on its head, at least temporarily. Following the merger of SSYS with Objet in 2012 and the acquisition of MakerBot this year, investors now expect SSYS to make an acquisition in the metal arena. This is not only to access new growth verticals; we believe there is concern that inaction will only lead to more expensive acquisitions in the future.”

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.


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