As economies around the world start to re-open from the coronavirus lockdowns, there’s still quite a lot of uncertainty about what the future holds. At Piva, we believe the world that emerges from this crisis will be even more focused on solutions that increase our resilience to shocks of all kinds and we remain committed to innovators who are making this our new reality.
As such — we recently invested in digital manufacturing innovator VELO³ᴰ, joining their $28M Series D funding round. Together with top-notch investors such as Bessemer Venture Partners, Playground, Khosla Ventures and TNSC, we’re very much looking forward to joining the VELO³ᴰ mission to revolutionize advanced manufacturing — bringing higher levels of efficiency, quality and resiliency to 3D metal printing previously unattainable.
The Potential for 3D Printing Solving Global Supply Chain Inefficiencies
The immense value in 3D printing can easily be demonstrated just by looking at the massive supply chain issues we’ve encountered recently as countries entered lockdown. While the pandemic has shined a spotlight on major gaps and vulnerabilities of a centralized supply chain system, the delay between where products are manufactured and consumed has been a long-standing issue. Due to the power of scale and supply concentration, businesses are often left with no other options and are forced to tolerate the inefficiencies and huge lead times — causing over purchasing and waste in product, tying up cash in inventory to meet desired service level, and thus reducing their ability to respond efficiently to volatility in the market.
In today’s world, when all industries should be working towards a more carbon neutral environment, we need solutions to make the supply chain less wasteful and more efficient, reliable and greener. 3D printing solutions are naturally an attractive option, offering the ability to print products or parts on site, easing the reliance on centralized and mass production.
However, while 3D printing has gained considerable momentum with the global market being worth approximately $12 billion in 2019 and a predicted growth rate of 14% from 2020 to 2027, the technology has been slower to adopt for mass production, particularly in metal manufacturing, due to inefficiencies in the design of parts to meet standards and quality control for mass production.
Enter VELO³ᴰ — Bringing Quality, Efficiency & Resiliency to Advanced Manufacturing
“VELO³ᴰ is spearheading the digital manufacturing revolution in the energy industry. Piva, and in particular Ricardo Angel with his deep knowledge of the energy industry and its challenges, understand the value that we bring to our customers. Moreover, each one of the partners at Piva that we have met have excellent relationships in the energy sector that can help us accelerate our growth.”
VELO³ᴰ is a California-based startup that has developed a breakthrough additive manufacturing technology with significant impact on the efficient design and manufacturing of complex components. The company has already demonstrated clear commercial traction in the aerospace and aviation markets — counting the world’s largest space launch company as one of its most loyal customers.
When we first hosted Benny Buller, Founder and CEO of VELO³ᴰ, at our office, we were able to see first-hand some of their incredibly intricate manufactured parts — 3D printed flawlessly. In the board room, Benny has developed a reputation for his candor and openness as well as overdelivering on some of the big technical challenges faced by VELO³ᴰ in its early years. Innovating in this space to meet the high standards and quality requirements for mission critical parts is no small feat and Benny has demonstrated great resilience, focus and dedication to bring this end-to-end integrated digital manufacturing solutions to market.
We believe there’s huge potential in other industries as well — particularly in the energy and power sectors — to be able to 1) only print what they need when they need it and 2) reduce the lead time from 9–12 months to mere weeks will create tremendous value for these companies. Imagine if just-in-time (JIT) manufacturing could be replicated across different industries, with efficient distributed manufacturing centers located close to demand centers. We believe that in this world, companies would not need to have cash unnecessarily tied to inventories, the lifecycle cost of goods would be lower along with the carbon footprint of goods, thus creating a more resilient market that benefits the industry and consumers.
However, there are still a few technical hurdles to be overcome before additive manufacturing technology can achieve mass adoption and significantly change the world as we envision it.
First, we believe that the capital cost per printed parts has to go down by 4x. With VELO³ᴰ, early adopters have clearly seen that the lifecycle cost of printed part is lower due to the decrease in post-processing needs. Given the relative price of these printers, further cost optimization will catalyst broader adoption of the technology.
Secondly, we believe that 3D printers must be able to compete with CNC tools (or computer-controlled, high-precision tools) in terms of operability, repeatability and reliability. New printers coming into the market need to achieve around 85%-90% reliability in order to win over existing contract manufacturers. By offering an integrated solution from design to printing to quality control, VELO³ᴰ’s printers allow for easy operability and repeatability.
Thirdly, design philosophy and approach as a whole need to change. The true value of additive manufacturing can be reaped from enabling a new generation of engineers to design and manufacture multiple parts into just one part which is more efficient, higher quality and lower cost, and being able to achieve this in hours compared to weeks or months. Never before has there been a single solution to combine the entire process from the beginning of design to the end of quality control to produce even better critical parts in manufacturing across industries — until now.
We believe that VELO³ᴰ will lead a new wave of more resilient, distributed manufacturing capabilities for the most critical components, which the world will need to ensure local product availability and timeliness, while mitigating potential future worldwide disruptions. We’ve been highly impressed by the ingenuity of the entire team and are looking forward to supporting them on their journey.