UNICORN STARTUP CARBON RAISES ANOTHER $260 MILLION

Xiao Zhong, Ph.D., Analyst

Although the amount of venture capital (VC) funding is only somewhat correlated with startup success, it is often an attractive metric that gets lots of customer attention. Today, 3D printing unicorn Carbon announced the close of a new growth funding round of more than $260 million. The new round, co-led by Madrone Capital and Baillie Gifford, brings Carbon's total investment to roughly $680 million and makes it the most VC-funded 3D printing startup in history. In this blog, we summarize Carbon's key technology and business aspects with the goal of providing an objective view of the company compared to others in the field.

What Carbon Said:

Carbon's technology started from co-founder and CEO Joseph DeSimone's research on light-induced photopolymerization. The Carbon team engineered a 3D printer architecture with a light source, a reservoir with UV-curable resin, an oxygen-permeable window, a dead zone, and a projector. The resulting 3D printer operates on a process called "Digital Light Synthesis" (DLS). Carbon claims that DLS uses both photo- and thermochemistry to create parts with better surface quality and mechanical properties compared to other light-based polymer 3D printing technologies while maintaining a much higher printing speed than incumbents. The company has also invested heavily in software. It has a series of software capabilities, including design, simulation, manufacturing, data security, and traceability.

In terms of business model, it operates on a leasing model, with several printing models available targeting different business cases. The company targets the markets where injection modeling can be replaced, such as consumer products (heavily marketed partnership with Adidas on its Futurecraft 4D running shoe), automotive (partnership with Ford Mustang for the F-150 truck and Ford Focus), and medical and dental (partnership with S4 Medical). To close the loop, Carbon (like Formlabs) pushes hard on developing new materials that can be printed using its models, including some FDA-cleared materials. With the new fund, Carbon plans to expand R&D efforts by establishing an advanced development facility (ADF) that enables a scaled-up manufacturing environment to better support customers and partners. It also plans to accelerate its growth in Europe and Asia, advance software capabilities, and work on new materials development.

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Our AI-driven analytical tool, the Lux Tech Signal indicates an exponential growth of 3D printing innovation interest 

Lux Take:

A major claim from Carbon is its printer's high printing speed. It turns out printing speed is a little overhyped by the 3DP community. It is only one factor that measures a printer's capability, and it makes little sense to claim a printing speed without a specific context – such as the part design, materials used, business case (prototyping vs. production), quality requirements, post-processing, materials efficiency, or labor cost. Instead of printing speed, a more appropriate metric to use is throughput per dollar, which measures how much output a printer generates per dollar invested. 

Formlabs claims to have a high throughput per dollar value (via a printer sales model). Moreover, an often-neglected analysis is the cost comparison between injection model and 3D printing. 3DP companies often emphasize the superiority of their technologies over injection molding, but rarely do they bring up the cost factor (time, material, lab; again, throughput per dollar is a good measure). A logical hypothesis is that technologies like Carbon's can offer higher throughput-per-dollar services when the production volume is low. The specific cutoff (numbers of parts) will depend on the specific project. When the production volume reaches a certain threshold, injection molding is more cost-effective. Therefore, claims on 3DP replacing injection molding are all premature, at least for those that do not specify a volume threshold and design complexity. 

Lastly, although Carbon still has not reached the breakeven point as a business (again, unlike Formlabs, which has been profitable with more than 500 employees and much less VC funding), it has made some great progress since its inception and has built a steadily growing team and customer base. It is also backed by top VCs and corporate VCs, which have no doubt brought value as well. 

Those who are interested in polymer 3D printing (or other materials 3D printing, for that matter) often face many choices: technologies, business models, choice of service bureaus. To navigate through all the hype, a thorough cost analysis with the right (not overhyped) metrics is a must-have.

FURTHER READING 

 -News: HP's Multi Jet Fusion is Now Used for More Use Cases with High-Volume Production Needs 
-Report: Tech Innovation in 3D Printing: Activity, Momentum, and Startup Trends (Members Only) 
-Insight: Evaluating the Three 3D Printing Unicorns and Unraveling How Each of Them Differentiates (Members Only) 
-Company Profile: Carbon (Members Only) 
-Ted Talk: What if 3D Printing Was 100x Faster? | Joseph DeSimone 

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