financing for growth in additive manufacturing

Financing for Growth in Additive Manufacturing

By

Jason Wehrs

B.S. Business Administration in FinanceB.S. Business Administration in Information Technology

Colorado Technical University, 2007

SUBMITTED TO THE MIT SLOAN SCHOOL OF MANAGEMENT IN PARTIAL FULFILLMENT OF THEREQUIREMENTS FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATIONAT THE

MASSACHUSETTS INSTITUTE OF TECHNOLOGY

JUNE 2018

@2018 Jason Wehrs. All rights reserved.

The author hereby grants to MIT permission to reproduceand to distribute publicly paper and electronic

copies of this thesis document in whole or in partin any medium now known or hereafter created.

Signature redactedSignature of Author:

Signature redacted-MIT Sloan School of Management

May 11, 2018

Certified by:

Visiting A

Signature redactedAccepted by: _

MASSACHUSETTS INSTITUTEOF TECHNOLOGY

JUN 0 7 2018

LIBRARIES

Matthew Rhodes-Kropfssociate Professor, Finance

Thesis Supervisor

Johanna Hising DiFabioDirector, Sloan Fellows and EMBA Programs

MIT Sloan School of ManagementoLU

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11- 7

Financing for Growth in Additive Manufacturing

By

Jason Wehrs

Submitted to MIT Sloan School of Managementon May 11, 2018 in Partial Fulfillment of the

requirements for the Degree of Master of Business Administration.

ABSTRACT

Digital fabrication technologies have been improving their capabilities and

competitiveness steadily over the past decade and may be approaching an inflection point in

their enterprise adoption. However, several important technological, economic (cost) and

business (adoption risk) barriers stand in the way of broader adoption. This research seeks to

explore the rich history that has driven the growth of Additive Manufacturing (3D Printing) in

the application of manufacturing of a displacement or augmentation of current production-

level techniques, what business model or characteristics will continue to drive growth and

industrial adoption, and the current limitation that must be overcome to unlock broader

enterprise adoption.

Furthermore, from the viewpoint of growth financing, this paper seeks to answer two critical

questions to highlight investment opportunities in the space of Additive Manufacturing; 1)

Where is digital fabrication positioned to compete with traditional manufacturing methods over

the next five years and what are the key enablers, and 2) As digital fabrication becomes more

competitive for different applications, who in the value chain benefits the most.

Thesis Supervisor: Matthew Rhodes-KropfTitle: Visiting Associate Professor, Finance

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Table of ContentsIN T R O D U C T IO N ............................................................................................................................................ 4

Thesis Objectives ...................................................................................................................................... 4

W hat this Thesis is Not ......................................................................................................................... 4

Research M ethodology ........................................................................................................................ 5

W HAT IS ADDITIVE M ANUFACTURING ......................................................................................................... 7

Total Addressable M arket ........................................................................................................................ 7

Benefits & Value Proposition ................................................................................................................... 7

3D Printing Techniques ............................................................................................................................ 8

U se C a se s .................................................................................................................................................. 9

Industry Application and Adoption Projections ..................................................................................... 10

HISTORY & EVOLUTION .............................................................................................................................. 12

H isto ry .................................................................................................................................................... 1 2

1980's to m id-2000's .......................................................................................................................... 12

M id -T e e n s .......................................................................................................................................... 12

P re se nt D ay ........................................................................................................................................ 1 3

D e a l A ctiv ity ........................................................................................................................................... 1 3

Geographic Concentration ..................................................................................................................... 17

W ho is Investing ..................................................................................................................................... 17

CURRENT LANDSCAPE & PLAYER M OVEM ENTS ......................................................................................... 20

Value Chain Analysis ............................................................................................................................... 20

Supply & M aterials ............................................................................................................................. 20

Equipment M anufacturers ................................................................................................................. 22

Design & Engineering Software .......................................................................................................... 24

Service Providers ................................................................................................................................ 25

E n d U se rs ............................................................................................................................................ 2 6

CHALLENGES OF ADOPTION & FINANCING ................................................................................................ 29

SYNOPSIS OF FINDINGS IN GROW TH FINANCING ...................................................................................... 34

Novel Advancements ............................................................................................................................. 36

Additive M anufacturing ..................................................................................................................... 36

M ass Custornization & New M arketplaces ......................................................................................... 37

CONCLUSION .............................................................................................................................................. 38

BIBLIOGRAPHY ............................................................................................................................................ 39

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INTRODUCTION

Digital fabrication technologies have been improving their capabilities and competitiveness steadily over

the past decade and may be approaching an inflection point in their enterprise adoption. However,

several important technological, economic (cost) and business (adoption risk) barriers stand in the way

of broader adoption.

Thesis Objectives

This paper seeks to explore the rich history that has driven the growth of Additive Manufacturing (3D

Printing) in the application of manufacturing of a displacement or augmentation of current production-

level techniques. In addition, an analysis of what business model or characteristics will continue to drive

growth and industrial adoption, and the current limitation that must be overcome to unlock broader

enterprise adoption.

Specifically, from the viewpoint of growth financing (Venture Capital & Private Equity), this paper seeks

to answer two critical questions to highlight investment opportunities in the space of Additive

Manufacturing;

1. Where is digital fabrication positioned to compete with traditional manufacturing methods over the

next five years (on a performance basis) and what new product and supply chain capabilities will

digital fabrication enable (mass customization, on-demand manufacturing)? What emerging

technologies and startups (materials, equipment, services, applications) will enable that?

2. As digital fabrication becomes more competitive for different applications, who in the value chain

(material makers, machine makers, service providers, application developer/end users) is going to

benefit the most (e.g. which parts of the value chain are most defensible and which are most likely

to be commoditized).

What this Thesis is Not

Where-as a lot of perspectives have already been written in the area of additive manufacturing and

adoption, this paper does not seek to duplicate or reinvent this well covered research. Therefore, the

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following topics will not be explored but rather will be referenced from industry analysists and

professionals for context.

e Industry specific uses will not be researched in depth, there has been heavy coverage from industry

experts in this space.

* Adoption projections has been widely speculated by industry experts such a predominate industry

authorities as Wohlers Report and Sculpteo's annual state of the industry surveys.

e Desktop printers will not be a focal point as this study specifically explores growth in production-

augmented additive manufacturing. The desktop printers are widely used by engineers for

prototyping and hobbyists, therefore these specifically businesses are omitted (i.e. Makerbot).

Research Methodology

To derive insights and provide a pragmatic perspective in application and investment opportunities

within additive manufacturing beyond theoretical synopsis, I worked closely with the investment team

at an early-stage venture fund in NYC, Particle Ventures. This venture fund focuses its funds primarily on

investments in digital transformation within slow-sector industries (manufacturing, construction,

agriculture, etc.) Furthermore; to supplement findings, primary and secondary research was conducted

through the following means;

* Primary research - answering critical qualitative questions by interviewing entrepreneurs,

operators, and experts in these frontier markets which the rest of the VC community is just starting

to think about. Examples of interviews conducted included:

High-Tech Research experts (Google & Apple), Executive Professionals in the industry (Advanced

Technologies, McKinsey, BCG, Cincinnati, Stratasys), Founders of startups currently operating and

exited (Formlabs, Desktop Metal, others), Academic Professionals including PHD students and

professors (MIT Media Lab, MIT Mechanical Engineering, MIT Material Sciences, and Rice

University), Prominent VC investors that have invested in companies prominent companies such as

Formlabs, Desktop Metal, Uber and many others.

* Secondary research - exploring the broader digital fabrication ecosystem to discern insights into the

ecosystem of players, new techniques and ground breaking research, and financing trends that has

driven the advancement and adoption in the market today, including;

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Ecosystem analysis that explores 450+ players across the value chain, including segmentation of

business models, value drivers and enablers, strategic movements within the markets, and

companies' concentration and technical advancements that has driven capital requirements and

investor confidence.

Publications research that discerns advancements within the 3D Printing market more broadly

including manufacturing techniques, business models, and technique and material advancements.

Publications include; Mckinsey, BCG, ATK, Wohlers Report, Industry Week, MIT Technology Review,

Forbes, Supercharged, Science Journal, Nature Journal, Fabbaloo, 3DPI, and Sculpteo.

Investment Activity was analyzed to understand where in the value-chain investment dollars were

funneled in the past and which type of firms and characteristics drove capital requirements and how

has that changed overtime.

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WHAT IS ADDITIVE MANUFACTURINGTotal Addressable Market

Since 3D printing's introduction at MIT in 1985, today it represents $5 Billion dollars in the global

market", Industry experts such as BCG expects this figure to triple by 2020 and Wohlers Report predicts

$20B by 2020 while reach $350B by 20352. Since 3D Printing's inception at MIT in 1985, these estimates

are rather optimistic given the slow growth in adoption over the past 33 years and hints towards an

inflection point in broader enterprise adoption.

There is no dispute, if Additive Manufacturing were to take off, it seeks to disrupt a very large portion of

enterprise manufacturing. According to Wohlers Report the global economy is $80 Trillion with $12.8T

(or 16%) representing manufacturing2 . Let's assume if 3D Printing techniques displaces just 5% of the

global manufacturing GDP, the total addressable market could be as much as $640 Billion Dollars.

Applying the same assumptions for specifically, the United States; the World Bank quotes the united

states GDP at $18.5 Trillion (2015 Actuals), with ~12% of that representing manufacturing for $2.22T.3

Again, assuming 3D Printing techniques displace just 5% of the United States' manufacturing GDP, the

total U.S. addressable market could be as much as $111 Billion Dollars.

Benefits & Value Proposition

According to Sculpteo's State of 3D Printing report (surveying nearly 1,000 companies), 90% of

respondents from America and Europe consider 3D Printing as a competitive advantage in their strategy.

In addition, the drivers indicate that these users are predominately using 3D Printing techniques to

"accelerate product development" (28% of respondents) followed by "offering customized products"

(16%).4

Furthermore, an abundance of additional benefits can be attributed to additive manufacturing such as

curtailing expensive carrying cost of slow moving products and parts in warehouse. SAP has crunched

the numbers on the benefits of reducing carrying costs, SAP quotes global inventory is over $12 trillion

dollars, if manufacturing could reduce global inventory by just 5%, it would free up -$500B in capital5. In

1BCG, How to Position Your Company In The 3D-Printing Value Chain, May 20172 Wohlers Report, March 20183 The World Bank, CY 20154 Sculpteo, State of 3D Printing, CY 2017s SAP, Metal 3D Printing using SAP Distributed Manufacturing, March 2017

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addition, on-demand manufacturing can provide added benefits in the areas of increased availability of

slow-moving parts, parts for emergency repair, shipping and transportation cost, and reduce import

tariffs, and tax exposure.

Sculpteo concludes that 47% of industry survey respondents have reported a Return On Investment

(ROI) for 3D Printing as being greater than the previous year, where-as this number was at 40% a year

prior (2016)6 indicating a growing impact and value proposition.

3D Printing Techniques

There are many disparate 3D Printing techniques which hinders adoption and requires a skillset to

understand the needs and limitations of each technique. Additionally, the techniques can vary according

to materials used or method of printing. Techniques can dictate speed, time to print, quality, print

resolution, and material type. There are 13+ different printing techniques out in the market today and

growing with new technical advancements in materials. Techniques that lead the market today are

Fused Deposition Modeling (FDM), Selective Laser Sintering (SLS), and Stereolithography (SLA). The

reason for this proliferation of techniques was due incremental advancements that addresses limitations

in a technique or to circumvent techniques while patents (expiring after 20yrs) were in place.

e SLS (1986) - SLS leads to mass customization in manufacturing and was developed at UT. The first

SLS (selective laser sintering) machine becomes viable and years later the patent was acquired by 3D

Systems. This type of machine uses a laser to fuse materials into 3D products. This breakthrough

opens the door to mass customization and on-demand manufacturing of industrial parts, and later,

prostheses. That same year Objet, a 3D printing systems and materials provider, creates a machine

capable of printing in multiple materials, including elastomers and polymers. The machine permits a

single part to be made with a variety of densities and material properties.7

e FDM (1989) - Fused Deposit Modeling technique was developed by Stratasys. FDM printed parts are

used for functional testing and engineering application. The high performance thermoplastic

materials it uses allow for great properties, opening the door to rapid manufacturing amongst other

applications.8

6 Sculpteo, State of 3D Printing, CY 2017Deloitte, Disruptive Manufacturing - The Effects of 3D Printing, UndatedAxis Prototypes, www.axisproto.com/solutions/, Undated

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* SLA (1992) - The first SLA (stereolithographic apparatus) machine is produced by 3D Systems. The

machine's process involves a UV laser solidifying photopolymer, a liquid with the viscosity and color

of honey that makes three-dimensional parts, layer by layer. Although imperfect, the machine

proves that highly complex parts can be manufactured overnight.9

Materials are a main driver for 3D Printing techniques, however one key limitation has been industrial

grade metals printed with speed, resolution, and affordability. In the market today, the use of plastic has

grown from 73% to 88% Year-over-year. Whereas resin materials known for its solid properties 35%

from 27% YoY, followed by metals at 28% from 23% the prior year, largely driven by new techniques in

Selective Laser Melting (SLM) and Direct Metal Laser Sintering (DMLS) and more affordable means to

print metals.10

Additionally, 3DP printing techniques offers benefits that traditional manufacturing cannot deliver. For

example; mass customization, shorter design and lead time, simplifying the supply chain and

manufacturing process, and lastly provides a significant reduction in materials waste.

Use Cases

3D Printing has been and continues to be largely leveraged for prototyping activities within R&D and

Engineering. According to Sculpteo's 2017 State of 3D Printing report, 3D Printing applications are as

follows within the industry; Prototype: 34%, Proof of Concept: 23%, Production: 22%, Market Samples

10%, followed by nominal single digit amounts in education, art and hobby.' 0

To further support the assertion, the following departments have reported to be leveraging 3D Printing

techniques; 62% R&D, 53% Design, 40% Production, 28% Engineering, and single digits for all other

department such as maintenance. 0

9 Deloitte, Disruptive Manufacturing - The Effects of 3D Printing, Undated1 Sculpteo, State of 3D Printing, CY 2017

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Industry Application and Adoption Projections

Today, the top industries to adopt 3D printing techniques have been automotive, aerospace, medical

and consumer. Largely these trends have been led by prototyping and mass customization of products.

Several examples of these areas are as follows:

* Automotive: BMW, Premiere in the i8 Roadster. The mounting for the top cover would not have

been possible using a traditional casting process. Now the 3D printed car part is stronger and weighs

less." and according to EY, they forecast 49% of automotive companies will directly manufacture 3D

Printed car parts to achieve operational efficiencies.

e Aerospace: GE's fuel nozzle that lowers fuel consumption by 15%, by making these products more

lightweight overall reducing the cost of ownership.' 3

* Medical: Casting of orthopedic tooth casting and orthopedic aligners with a dominate provider in

the industry providing the printers to orthodontist, dentists, and labs with the value proposition of

dramatically shortening delivery times, improving service levels, while also potentially reducing costs

and creating perfect fitting aligners in minutes.

* Consumer: Producing insoles for shoes, developed by companies like SOL (medical grade and direct

to consumer insoles), similarly being explored by the strategic partnership between Adidas and

Carbon 3D.

Some experts predict production application of 3D Printing techniques will grow to $7.4 billion and the

consumer market to $0.4 billion. But growing at a CAGR of 29% and to the value of $12 billion,

prototyping will continue to be the predominate use-case for those companies that continue to improve

their offerings.15

1 BMW, https://www.bmw.com/en/innovation/3d-print.html, Undated1 EY, Global 3D printing Report 2016, CY 20161 3DPI, The Future of 3D Printing, Lee-Bath Nelson, June 201714 Envisiontec, https://envisiontec.com/3d-printing-industries/medical/orthodontic/, Undated1s 3DPI, The Future of 3D Printing, Dr. Conor Maccormack, October 2017

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Exhibit: 3D Printing Application16

Several industries have embraced 3D printing

* Specialraed Componentsfor engine production

* Innovative designs. suchas concept car chassis

* Productioowappro0Vedconponents, suchas fuel nozzles,

" Prototype jet engine parts

. Orthodontic implantsfor hips and spines

" Surgical guides

SCustom jebey* sigh-goonce

sporting goods

* New productawith Low to medium volumerior dnaim for

" Lightweight structuras.such as chassis

" High-performmnoe pets.such as sensor housingsRAti-scale maulacmjreof semi-standardoonponefts

*Personalized prosthetics

-nApparelpmducdn* Fashion oceories

Producton

+ High value-to-weight ratio" High fty-to-buy and

material waste ratio

" Complex geometry* Complex muipsrt

assembly undertraditional manufacturing

* Need for form-function-fitcustonization

SO"o&t K Mm y ffaMyl

16 AT Kearney, 3D Printing: A Manufacturing Revolution, CY 2015

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I

HISTORY & EVOLUTION

History

3D Printing technologies have reached its peak hype (and corresponding investments) years ago and

now in a period of hype hangover. Investors and industry critics alike believe that this may have all been

a disillusion as no major advancements have taken place, nor has industry verticals seen massive

applications within their production cycles. The reason for this is because of the many limitations still

pronounced today, such as speed, costs, precision, accuracy, and quality; all of which is addressed within

cover in the 'Challenges' section.

1980's to mid-2000's

Since inception in the early to mid- 1980's where innovations in new 3D Print techniques and materials

were advancing quickly. Patents and legal battles forced companies to innovate and protect as they

deliver their value propositions to the market. For example, the SLS (Selective Laser Sintering) technique

was born which allowed many other types of mixed materials and various properties to be printed. It

was during the late 1990's it was difficult for a 3D Printing equipment company to gain access to capital

which can be attributed to the .com/software revolution that had much higher margins and lower

capital requirements. Shortly after the .com-burst innovation in the 3D Printing areas started to take

flight again with the first 3D printed organs using patient's cells were tested and accepted by human

bodies, including the first 3D printed kidney in 2002.

Mid-Teens

For the next 15 years, only incremental advancements in materials and techniques had been taking

place however broader application was being explored. From 2013 - 2014 there was much hype and

increased capital injected into the 3D Printing space. The desktop printer was just entering the

mainstream consciousness, bio-printing was providing new promises of revolutionizing the healthcare

industry and access to capital was flourishing. New advancements that contributed to the hype during

this time included; the world's first 3D Printed robotic aircraft, 3D printed car, 3D printed gold and

jewelry, and also the first 3D Printed prosthetic jaw was implanted (2012)."

It wasn't until the predominate technique patents began to expire through 2016, mostly owned by (and

helped bring to dominance) the market leaders, 3D Systems and Stratasys. By 2016 many startups began

17 Deloitte, Disruptive Manufacturing - The Effects of 3D Printing, Undated

12

replicating the technologies and developing new innovative business models on top of these

technologies in order to compete more efficiently within the market.18 For example, Shapeways

launched their co-creation community service for DIY 3D Print hobbyists allowing artists, architects, and

designers to share and print. It was during this time when venture capital firms began gaining

excitement with the promises of 3D Printing and wider enterprise adoption within the market.

Present Day

Today, many of those companies have closed, unable to sustain growth in the market and have led

investors to become skeptical of its promises.

Like many mature markets, today we are seeing an influx of consolidation by the biggest players (i.e.

Stratasys, 3DSystems) in the market that were the benefactors of early patents, are no longer innovating

and now seek competitive advantage through patent acquisitions and equity infusions of new

techniques. Several of the drivers for an increase in market consolidation activity within 3D Printing are;

gaining early-adopter customers where current use-cases are few and far between, talent acquisition to

support existing clients, and lastly industry users are making strategic acquisitions to bring talent and

techniques in-house to further build out and control their capabilities.

New novel patents being developed are incrementally making current technologies more reliable,

however are having troubles rolling-out game changing technology and actually making ripples in the

market. Though the outlook is not all bleak, section 'Synopsis of Findings in Growth Financing' explores

additional innovative opportunities that are likely to disrupt and gain tractions.

Deal Activity

Platform's such as Pitchbook allow for the surveying the investment landscape since 1990's including

Venture Capital funds ($0-$25Million) Private Equity ($25+ Million), and M&A activity. Overall, total

capital being invested in the 3D Printing industry across the value chain (materials, equipment, design,

services) has been increasing. This increase is driven primarily by few very large deals which signals

consolidation in today's overall investment landscape. The below infers the objectives of each investor

class:

1 TechCrunch, How Expiring Patents Are Ushering in the Next Generation of 3D Printing, May 2016

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Venture Capital firms seek to make investment early with budding startups that have a large risk of

failure or stagnation and thus can command large amounts of ownership equity to compensate for

their risk of return. Returns are contingent on future exit multiples driven by either a buyout from a

private equity firm, an acquisition from a strategic company, or an Initial Public Offering (IPO).

Expected multiples will range between 7X - 10X return on their investments, investing in companies

they believe may have sustainable competitive advantage. This investment behavior can often lead

to continued investment in flailing companies for resurrection as these early investors don't want to

lose their equity position while still hopeful of an exit.

e Private Equity motivations are largely driven as steady growth investments. The companies these

firm are investing in are larger, have a significant customer base and traction in the market - their

business models proven out, and a steady growth trajectory. Private Equity firms are motivated by

assisting these companies on their growth journeys by providing capital to be deployed for growth

initiatives with a hopeful exit to a large corporate acquirer providing a multiple on invested capital

(MOIC) of 20-25% or an IPO.

* M&A and Strategic Investments are driven by several motives and two types of companies. First

type of company engaging in this activity are large corporates operating within the 3D Printing value

chain (Example deals include; Stratasys/Solid Concepts, 3DSys/Layerwise, Arcam/Advanced

Powders, Carpenter Tech/Puris) These companies look to secure competitive advantage via patents

or people skills (also known as an acqui-hire). Second type of company are end-users in the industry

(Example deals include; GE/Arcam, Siemens/Material Solns, Oerlikon/Citim) These companies

primarily looking to adopt new capabilities and acquire the skill-sets to continue operations

internally through acqui-hiring.

As part of the capital analysis (supported by figures below), three key insights can be drawn out from

how the market has matured to-date;

1. Companies are Maturing: Observed by the growth in PE deals (+10% 5yr deal count CAGR), this

uptick in activity at much larger dollar amounts signals a maturity of the companies that had

promising innovations and market adoptions in the past several years.

2. Investor confidence is decreasing: While there are few PE deals overall (22), total amount of VC

deals is quite large (124) though this figure is down 5% YoY and 30% the previous year showing signs

decreasing investor confidence. Note that over 40% of VC deal-flow are at the seed funding level

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($O-$500K capital) which indicates a lot of innovations are still being explored by budding

entrepreneurs.

3. Market is consolidating: Though driven up 16% CAGR over the past 10years, we can infer that the

+30% YoY of invested capital is largely driven by an influx of M&A (+17% 5yr deal count CAGR) plays

for acquiring the viable businesses. M&A activity in 2017 alone represents 31 exits as compared to

two IPOs. Since 1990 there has been a total of 179 M&A deals compared to 11 total IPOs.

15

Exhibit: 3DP Deployed Capital Landscape"

$MM

Oeral Industry(Last Un0a) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0Y0 5yrCAG 10yrCAGRNumberofDeals 20 20 14 30 53 65 126 235 273 230 207 -10% 13% 30%Total Capital Invested $565.0 $356.0 314.0 $94.0 $246.0 $299.0 $1,650.0 $1,120.0 $821.0 $1,630.0 $2,2120.0 30% 6% 16%Median DealSize 7.2 7.0 0.4 3.0 3.8 0.6 0.5 0.3 0.7 0.6 1.0 67% 19% -20%Median Post Money Valuation 21.8 48.0 0.0 6.0 32.2 4.9 53.1 14.8 15.6 19.3 14.0 -27% -28% -8%

TotalDealCount 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Private Equity 10 7 5 4 is 15 1 22 26 15 22Venture Capital 10 14 11 17 31 39M&A 4 4 3 10 17 17 21 31 30 29 40Pre-Venturs 0 0 0 2 6 10 31 46Other Private Companies 0 0 0 0 0 0 0 0 2 1 1Debt Financed 3 4 3 7 7 a 1 32 23 14 13Al 21 20 14 30 55 67 141 265 294 245 208

Totall0ea9Value 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Private EquityVenture Capital

M&APre-Venture

Other Private Companies

Y.0 33C0 10Sy CAr6 Years0'i18

47% 10% 9% 159-5% 7% 32% 0030% 17% 29% 212

-43% 1096 NA 349

0% NA NA 4-7% .8% 13% 132

-15% 10% 29% 1360

oy SyrCAGR 10yrCAG Yeats' 9018M$59.9 1 $94.5 W$492.1 339.0 =374.2 1 $45.3 ,362.6 2909% 29% 12% $3,811.1I 28.7 3 72.7 W14.8 33.8 5.5 45.2 6 j354.6 .3 1 4 732.1 -15% -14% 43% 4229.7

1 42.2 0.9 0.2 59.3 3 5.6 117 N 293.8 6.4 183.6 M 3.2 i 39.0 72% 48% 40% 3427.80.0 0.0 0.0 0.5 1.0 6.5 5.2 20.6 38.2 18.0 25.6 42% 49% NA 115.70.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 NA NA NA 0.3

AN ko * INE 31 WN hf W w2k 30% 696 16% 0930.1

*Some Overlap (.e. M&A + Debt F nanced)

E0t By 61fCompanies 2007 2000 2009 2010 2011 2012 2013 2014 2015 2016 2017 YOY Syr CAG 10yrCAGIR Years190-13IPO 1 0 0 0 1 0 3 1 1 2 2 0% -10% 8% 11Secondary Offering 0 0 0 0 0 0 2 0 0 0 0 NA -10096 NA 2Buyout 0 0 0 0 0 0 0 0 0 0 1 NA NA NA ISecondary Buyout 2 0 0 0 0 0 3 1 1 0 2 NA -10% 0% 7Investor ryout byMgmt 0 0 0 0 2 0 0 0 0 0 0 NA NA NA 2Merger/Acquisition 5 5 4 7 -3% 20% 22% 179

.everse Merger 0 0 0 0 2 3 0 2 1 0 0 NA NA NA aB.3nkr0pcy/OqA4tlon 0 0 0 1 0 0 0 0 4 0 0 NA NA NA 5B ,Ankrpty/Admi,&63.,o 0 0 1 0 2 0 0 1 1 0 0 NA NA NA SAN 5 4 7 23 19 22 31 32 34 36 6% 13% 18% 204

DealCount bySite 2007 2006 2009 2010 2011 2012 2013 2014 2013 2016 2017 Yo NyrCA00 10ySCAr Years 90-'180 -499 K 1 2 I 3 9 4 E 20 .. -14% -2% 54% 363100k-0.9M 2 3 | 1 0 1 1 4 1 7 15 IS 29 10 1 14 40% 1996 24% 861M-4.9M 3 1 1 a 12 1 10 17 = 33 = 34 26 30 15% 15% 29% 1715M-9.9M 2 3 1 I 3 4 1 5 6 7 13 7 18 157% 32% 20% 6910M- 24.9M j 2 3 0 0 I 4 0 I 9 U 1 ai I 9 1396 3296 10% 49

VC 0o- 2469 1 0 11 6 U 20 3 S 2 TU 0J 1196 99 32% 742PE 29M-99M 1 0 0 | 1 1 4 0 1 6 6 7 9 6 -33% 0% 22% 40PE 100M-499M I 2 1 0 0 0 2 2 2 1 3 2 -33% 0% 0% 1PE 500M -999M 0 0 0 0 0 0 1 0 0 1 0 -100% -100% NA 2PE 1B-2.49B 0 0 0 0 0 0 0 0 0 0 1 NA NA NA 1

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Tood.Copftalinvested 2007 2000 2009 2010 2011 2012 2013 2014 2015 2016 2017 YY SlitCA0 OWCAOR Years10-18

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I 1.3 1 2.4 0.5 0.0 0.5 2.7 4.3 9.7 211 6.1 8.6 40% 19% 24% 57.2I 8.4 1 3.6 I 3.8 1 19.2 26.7 24.6 34.5 .4 NM 3 S0.9 5 52% 22% 28% 393.8* 16.2 22.0 9.0 1 16.5 24.0 33.6 37.2 45.5 45.3 167% 34% 25% 456.4

214 ~ 54 0.0 0.0 ~ 5 0-0 ~]99 EP ~ 496 20% 23% 712.14573 $1. ff $ 36- 07' D 3 I i 31 6WT Wr21 I I 3460 W23B.S ff .7 45% 27% 2596 $19415.5

I 35.0 0.0 0.0 1 56.8 139.7 0.0 R 331.4 306.4 E 227.9 26.1 2505 -41% -7% 24% 1773.82.7 282.0 0.0 0.0 0.0 231.8 .2 .0 2513 0 .0 W 315.0 -1M9 -14% -5% 3096.0

0.0 0.0 0.0 0.0 0.0 0.0 .O 0.0 0.0 .9 0.0 -100% -100% NA 1104.9

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1 NA NA NA 1210.0$365.0 $355.7 $130 $93.5 $206.4 $209.3 $1,650.2 $1,127.5 $023.2 $1,631.9 02122 30% 6% 16% $8,030.1

2007 2000 2009 2010 2011 2012 2013 2014 2013 2010 2017 YGY 593CA606 10SyCr86 Years'90-18$0.1 $0.2 $0.2 $0.1 $0.3 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 -9% 2% 6% $0.10.6 0.8 0.5 0.0 05 I 0.7 I 0.6 I 0.7 I 0.7 I 0.6 I 0.6 0% 0% 0% 0.72.8 3.6 3.8 2.4 2.2 2.5 2.0 1 2.0 1 2.3 2.0 2.6 32% 6% -1% 2.3

1 M .3 5.5 6.0 1 .7 = 6.2 6.5 .7 6.S M .7 4% 2% -2% 6.60.0 00 ().0 1 .% -3% 4% 14.5

VC 0-24M $4.7 I $6.7 $2.3 $1.0 $4.3 $1.6 $16 $1.7 $2.1 $2.2 $2.9 30% 17% -5% $2.2PE 29M-99M 1 35.0 0.0 0.0 I 56.8 1 34.9 0.0 I 55.2 I 511 I 32.6 I 47.3 I 41.7 -12% -7% 2% 44.4PE 100M-499M 241.4 282.0 0.0 0.0 0.0 I 117.9 291.6 280.0 U 251.3 128.7 1 157.5 22% -149 -5% 206.4

PE 500 - 999M 0.0 0.0 0.0 0.0 0.0 0.0 6.0 0.0 0.0 .9 0.0 -100% -100% NA 592.4PE 1B-2.498 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1] NA NA NA 1210.0

AN $43.5 $29.6 $.3 $4.5 $8.5 $7.3 $17.6 $7.0 $4.7 $13.6 $16.6 22% -1% -10% $11.2

Avg PostMoneValuation 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Y0Y 9YrCAGR 10yrCA YearsW90-18

0-499K $0.0 $0.0 NA $0.1 $0.5 $0.4 $0.0 $5.5 I $3.6 $1.8 I $2.0 12% 276% NA $2.9500k-0.9M 0.0 0.0 NA 0.0 * 5.0 00 0.0 I 5.0 3.2 8.9 I 3.1 -65% NA NA 4.01M-4.99 0.0 0.0 NA .5 .1 3. E 13.9 N 15.8 N 13.5 12.6 4.7 95% 15% NA 05.35M- 9.9M a 7.2 NA 4.2 o.1 .2 S.0 M 4.7 18.7 -53% -7% 11% 33.310M - 24.9M 18.4 6 NA 0.0 0.0 1. . 6 -51% -16% 7% 46.1

VC 0-24M $144 I $370 NA $9.3 1 $341 $12.1 $26.4 $156 $21.0 $24.5 $17.0 -31% -11% 2% $20.6

PE 29M - 99M I 35.0 0.0 NA 0.0 | 39.5 0.0 1 132.4 j 126.1 I 132.6 166.8 165.7 -1% 6% 19% 136.4

PE 100M-499M 243.8 3 282.0 NA 0.0 0.0 I 017.9 flj 280.0 1 251.3 .S . 40% -14% 21% 032.5PE 500M-999M 0.0 0.0 NA 0.0 0.0 0.0 604.0 0.0 0.0 762.8 0.0 -100% -100% NA 683.4PE IB - 2.49B 0.0 0.0 NA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 NA NA NA 1210.0

AN $94.3 $86.7 NA $9.3 $34.9 $30.1 $147.1 $44.0 $3.5 $144.0 $143.1 -2% -20% 5% $102.3

19 Pitchbook, 3D Printing Landscape, February 2018

16

Geographic Concentration

As of 2017, the majority of 3D Printing startups are concentrated in North America (92 companies) and

Europe (62 companies) and a very distant third, Asia (9 companies). It is no surprise that the amount of

capital being dispersed around the global are concentrated in North America (68% of total capital) and

Europe (28% of total capital) as their economies represent some of the most advanced nations in

technology, R&D, and engineering.

Exhibit: AM Global Footprint20

Overall by Region 2007 2008 2009 20M0 2011 2032 2013 2014 2015 2016 2017 YoY SyrCAG 10yrCAGR Years 90-'Europe

Company Count 0 2 10 17 21 41 76 85 75 62 -17% 11% 26% 271DealCount 9 5 3 11 19 21 47 86 100 87 68 -22% 10% 25% 456Capital Invested $541.8 $7.0 $0.0 $9.4 $26.3 $16.8 $181.8 $217.1 $453.8 $837.5 $185.6 -78%- 1% -11% $2,477.1

% of Global Capital 2% 0% 10% 11% 6% 11% 19% 9%North Aer0a

C= pny Count 9 14 8 14 26 36 59 99 109 102 97 -5% 13% 30% 315ealCount 9 14 9 16 29 39 67 126 136 125 118 -6% 15% 33% 688

Capital Invested $14.1 $347.8 $13.6 $81.0 $175.2 $182.0 $1,457.2 $876.9 $294.9 $719.1 $1,892.0 163% 7% 72% $6,053.8% of Global Capital 2%outh America

CompanyCount 0 0 0 0 0 1 2 2 2 1 0 -100% -100% NA 5Deal Count 0 0 0 0 0 1 2 2 2 1 0 -100% -200% NA 6CpItlInvested $0.0 $0.0 $0.0 $8.0 $0.0 $0.0 $0.0 $0.1 $0.6 $0.0 $0.0 NA -100% NA $0.7

%6f IobalCapltaI 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%Asia

Company Count 0 0 0 1 1 2 7 11 11 7 9 29% 6% NA 32Deal Count 0 0 0 1 1 2 8 11 20 8 10 25% 6% NA 61Capita Invested $0.0 $0.0 $0.0 $0.1 $0.5 $100.4 $4.4 $5.8 $45.0 $1.0 $15.0 1341% 36% NA $172.1%olfGobalCapital 0% 0% 0% 0% 0% M .. , 0% 1% 5% 0% 1% 2%

AfricaCompanyCount 0 0 0 0 0 0 0 0 1 0 2 NA NA NA 2DealCount 0 0 0 0 0 0 0 0 1 0 3 NA NA NA 4Capital nvested $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.1 NA NA NA $8.1

%ofGlobalCapital 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%Middle East

Company Count 1 1 1 2 3 1 1 6 8 7 3 -57% 32% 13% 18DealCount 1 1 1 2 3 1 1 6 11 7 5 -29% 50% 20% 39Capital Invested $9.0 $0.9 $0.2 $3.1 $38.3 $0.0 $2.0 $72.1 $26.9 $25.7 $24.1 -6% 86% 12% $152.3%ofGlobalCapital 2% 0% 1% 3% 16% 0% 0% 2% 3% 2% 1% 2%

OceaniaCompanyCount 1 0 1 0 1 1 1 4 3 2 2 0% 19% 8% 8DealCount 1 0 1 0 1 1 1 4 3 2 2 0% 1% 8% 16Capital Invested $0.0 $0.0 $0.0 $0.0 $6.1 $0.0 $0.0 $0.3 $0.0 $40.1 $5.2 -89% NA NA $59.7%ofGlobalCapital 0% 0% 0% 0% 2% 0% 0% 0% 0% 3% 0% 1%

TotalCompany Count 19 20 12 27 48 62 111 198 219 194 175 -10% 12% 28% l51Deal Count 20 20 14 30 53 65 126 235 273 230 206 -10% 13% 30% 1272Capital Invested $865.0 $355.7 $13.8 $93.5 $246.3 $299.2 $1,645.4 $1,122.2 $8211 $1,631.4 $2,1221 $0.3 $0.1 $0.2 $8,915.8

Who is Investing

The majority of investors (corresponding with the significant amount of deals) are still venture capital

firms while PE shops don't even compare to the amount of deals. Below the total number of deals of the

top 10 investors within this space driven by VC firms.

20 Pitchbook, 3D Printing Landscape, February 2018

17

Exhibit: Most Active Investors21

Investors Type Total Last 2yrs Last 5yrsMost Active Investors

3D SystemssSv

Techsta rsLux Capital500 StartupsY CombinatorNSFMass ChallengeHigh-Tech GrunderfundsFABulous

Corp

AcceleratorAcceleratorVCAcceleratorAcceleratorGovAcceleratorVCAccelerator

28141111111010999

151311101087764

Note that the top investor with a total of 28 is the market behemoth 3D Systems ($1.16B market cap) -

a 3D Printer equipment shop made famous for holding the patents of the dominate SLS and SLA

techniques. 3D Systems fights for market share with their main competitor, Stratasys ($1.12B market

cap). Investment activity from these 'strategics' and other large end-user corporations through their

Corporate Venture Capital funds have been an uptick with the assumption to provide access, future

investment opportunities, and customized products for their use. According to CBnsights, this activity

type today represents 28% of investment activity in the 3D Printing field today and growing.

Left Exhibit: Corporate vs. Industrial Printing Investors22

Right Exhibit: Active Corporate Investors21

EO N Corport vs. uerw hidustrt30 Sfpaliu bntraU 2013 - 2017 YTD (1 228/2017)

m A e Othr kneOrs COrocWate CVC Investrs SCBINSIGHP

Investors Type Total Last 2yrs Last SyrsMost Active Corporate Investors

3D SystemsAutodesk (Inc. Ventures)StratasysSiemens (Inc Next47)GE VenturesProdways GroupChevron Tech VenturesSumitomo (Presido Ventures)Klinger (K-Invest)GVBMW i-VenturesVoxeijetTrumpFSoftBank CapitalSigmaLabsSaudi AramcoRenishawProtoLabsPorshe HoldingsMakerBotLowes VenturesIntel Capital

3DP3DP3DPEquipEquip3DP

Oil & GasMfg

Fluid CtrlTechAuto3DP

EquipFin

3DPOil & Gas

Equip3DPAuto3DP

RetailTech

21 Pitchbook, 3D Printing Landscape, February 20182 CBInsights, Corporate vs. Industrial Printing Investors, December 2017

18

Exhibit: Most Active Corporate in Industrial 3D Printing2

*CE Most active corporates in industrial 3D printing* 2013 - 2017 YTD (12/27/2017)

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9"y"

)w

Ngff.~"fL"Off"

\e //m

Hand

IwIw

I ' -0

Wkk

CBInsights, Corporate vs. Industrial Printing Investors, December 2017

19

hen

CURRENT LANDSCAPE & PLAYER MOVEMENTS

Since the inception of Additive Manufacturing (AM) techniques, many companies have come and gone

in the equipment and materials spaces and new innovative business models have been developed, all

looking to move the supply chain closer to the customer. Given the disparate 3D Printing technologies,

skills sets required, and the capital outlays required - many service-oriented business models, known as

Service Bureaus have surfaced providing access to these techniques and benefits to small and medium

sized companies that don't have the available capital or support to make large 3D Printing investments.

To additionally make ease of market adoption through service-oriented models, companies looking to

redefine the customer experience of design and transaction activities. Below is each component within

the value chain broken down to characterize each business models, technologies, players, movements,

and trends.

Exhibit: Additive Manufacturing Value Chain

Equipment Design &sevcSupply & Materials Maufactrer Engieering PoiesEnd Users

Value Chain Analysis

Supply & Materials

Supply and materials are the inputs the 3D Printers themselves. These companies' business models can

vary significantly from 3rd party material providers, exclusive partnerships with equipment providers,

and also often R&D shops looking to advance breakthroughs in materials to develop patents that

broaden the use-cases of 3D Printing application in the market.

Equipment Deig & sericeSupply & Materials uProvides End UsersSoftware

20

Enabling Technologies:

e Materials can range anywhere from standard materials (ABS & PLA), specialized materials (Nylon,

TPE, Acrylic), exotic materials (Wood, Gypsum, Carbon Fiber), and metals (Bronze, Copper). However

largely the majority of the materials used in the market are standard materials such as plastics &

resins, followed closely by metals.

Players:

e Third Party Providers provide a plethora of material varieties to various end users and industries.

Examples: Carpenter Technologies, Advanced Powders & Coatings, and Verbatim

* Advanced Materials Providers invest large capital in R&D, and typically requiring specialized 3D

Printing techniques and equipment for their material advancements, driving integrations with

equipment providers. Examples: Materialize NV, Nano Steel, Veridis3D

Trends & Disruptions:

* Growth in metals - Given 3D Printed, production tested metals are one of the precursors to broader

industry adoption, forecasts suggest that the global market for 3D Printed metals will be $12B by

2028.24

e Consolidation - Within material providers for superior and broader product assortments. Example:

Carpenter Technologies acquisition of Puris ($35MM in 2017)

e Control of the value chain - Many material companies either establish exclusive partnerships with

equipment providers for proprietary, sole-sourced materials thus securing order volume. And others

are developing the equipment themselves, developing the techniques suitable for their unique

materials thus serving two business models. Example: BMF develops materials, equipment, and

services for 3D Printed lenses

" Moving supply closer to consumers - The industry is beginning to see end-consumers (industry

power-users like GE), moving the supply chain closer by acquiring materials companies, presumably

to stave of disintermediation by competitors of key materials inputs that could potentially harm

their margins. Example: GE acquisition of Advanced Powders

24 PRNewswire, The 3D Printing Metals Market Will Be Worth $12B in 2028 Forecasts New IDTechEx ResearchReport, July 2017

21

e Material advancements - New material breakthrough continue to be explored which is bringing new

use-cases, capabilities, and reliability to the market. While some industry experts believe materials

will become commoditized, VC firms believe if patented and controlled correctly could lead to

explosive growth. Much of these breakthroughs are coming from large institutions in the areas of

polymer bonded magnets, strengthened aluminum alloys, and bio-tech to name a few. Examples:

like Oakridge Labs, MIT

Equipment Manufacturers

The most concentrated of startups and competition is within the equipment provider space. Largely

driven by techniques with existing patents can be augmented and incremental innovations are added to

existing technologies.

Equipment Design &SevcSupply & Materials Mnfcues Engineering PoiesEnd Users

Software


* Comprised of Desktop and Consumer equipment providers and Industrial Equipment providers. The

proliferation of companies in this space are driven by specialization required for a material or

technique (i.e. FDM, SLA, SLS, +8 others), a function (PCB, Knitting & sewing), and print volume as

determined by axis size. Examples: Stratasys, 3DSystems, Desktop Metal

Players:

* Consumer equipment manufacturers such as Makerbot (Stratasys), Robo, Printbot, Formlabs which

serves consumer hobbyists, educational institutions like universities, and R&D shops.

* Industrial equipment manufacturers such as 3D Systems (SLA & SLS Machines), Stratasys (FDM

Machines) EOS (SLS & DMLS Machines).

* Specialized equipment manufacturers such as Arcam (Advanced Powders), Luxexcel (Lenses),

Desktop Metal (Industrial Strength Metal), and Carbon 3D (Carbon Metal).

22

- New entrants include large companies that have been attracted to the idea of enterprise adoption

and are now looking for to stay relevant which includes significant powerhouses like Toshiba and

Kodak.


* Growth in equipment providers - 3D Print equipment manufacturers is a very crowded space, in

2015 62 companies sold industrial grade Advanced Manufacturing machines, up from 49 the year

25prior. In the U.S. alone 20 companies sold AM machines up from only 5 in just 2013.

* Consolidation for product range - There are large amounts of activities of the major players

acquiring all across the value chain to broaden their offerings and reach for greater competitive

advantage. Example: Stratasys (industrial) acquisition of Maker Bot (consumer)

* Margin grabs through materials - Many equipment providers will sole-source their materials to one

manufacturer, often even leading to M&A activity to further increase their margins enjoyed by

materials provider business models.

* Production vs. prototype - The biggest growth opportunity is displacing or augmenting production

and the race between some of the largest equipment manufacturers has commenced to secure an

early position in the market. HP just signaled their intent in the market to push to production only

equipment.

e Protecting the market via exclusive resale contracts - Stratasys secures their distribution position by

establishing exclusive contracts with the major resellers, making it difficult for HP and 3DSystems to

elbow their way into the market. However, each of the companies continue to invest heavily on

sales staff to further control the sale of the value proposition including piloting pieces of a potential

customer's supply chain to help articulate a change in production processes and the added benefits.

e Incremental efficiency advancements - Most new companies are developing new IP to decrease the

time of printing via automated post-processing systems and increase the quality and accuracy of

prints with real-time monitoring and adjustment systems. It's no surprise there is much M&A

activity in this space from the market giants who are innovating less.

23

25 Wohlers Report, March 2018

Design & Engineering Software

Software is the digital layer and human interface to 3D Printing systems. This area continues to evolve to

increase the accuracy of translating design to print, ease of design, workflow management, remote

control and monitoring through APIs, and even access to new marketplaces.

Equipment I Design &servicSupply & Materials E Engineering End UsersManufacturers Software 3ProvidersEnUss


* Though the digital layer is broad it is critical in the control and application of additive manufacturing

printing. This includes 3D Scanning and digitization, online databases of files and crowd sources, CAD

software, workflow control software, and topology optimization (accuracy).

Players:

- CAD Design & Rendering: Computer aided design software packages are lead primarily by giants

although smaller companies are finding some traction in this area. In addition to a plethora of other

open-source software that is compatible with many machines, by producing STL file (common file

format accepted ball all 3D Printers). Examples: Autodesk, Materialise, Robo, and PrintBot

- Workflow Management & MES: These software packages work to optimize the equipment

themselves from up-time, automation, accuracy and quality control. Examples: SAP, Authentize, and

Carbon 3D

- Crowd Sources: Opening a new marketplace for design sharing, companies are beginning to unlock

'the crowd' in sharing already architected, ready to print STL files. Examples: CAD Crowd, Design

Crowd, and Quirky


* Partnering across value chain to access the customer - As designers realize they do not own the

customer, many companies in the design layer are finding the best way to market is by pairing up

exclusively with providers in the market. Examples: Make Printable & 3DHubs & Shapeways (Service

Bureaus), Polar 3D with Flashforge (Equip mfg), Zverse with 3DSystems (Equip mfg)

24

* Consolidation to retain dominance - The largest player in the space continues to flex its strength

through acquisition, and others with deep pockets are following suit. E:&7p't Autcdk &

* Service Bureaus investing to streamline processes - Given the uptick from the market in Service

Bureau business model (3DPrint outsourcing), many of these companies are investing in the digital

layer to help automate their distributed workflows, decrease downtime, and provide ease of use to

consumers via APIs to machines. Examples:

Rapid Manufacturing - eRapid Plugin streamlines design > quote > production,

Shapeways - Upload API allows users to upload designs to the marketplace,

Sculpteo - CAD Cloud allows for better workflow automation, job scheduling, and capacity opt

Plethora - CAD Add-in provides instant feedback on design compatibility and quotes

Service Providers

Service providers are taking various forms of business models to help make a better connection with 3D

Printing and end users that have manufacturing needs. Typically, these Service Bureaus come in two

forms; a managed (distributed) marketplace with a national or global network of 3 rd party fulfillment

providers or an open marketplace (open bids by any 3 rd party provider). Often these companies will help

the customer determine if their products are better served by 3DPrinting or other techniques such as

cast molding or CNC and assist with RFQ process and funneling work orders to available fulfillment

locations.

Design & EndvserSupply & Materialsuen Engineering End UsersSupy aeras Manufacturers Software Prvdr


Industrial and non-industrial scale services through distributed networks of printers, managed

networks of printers, open networks, and lastly ecommerce which sells printed products made to

order. These can all be summed up in the industry as Service Bureaus that provide the end to end

service of 3D Printing (and other methods) to end users, thus reducing the cost barrier for

consumers to leverage 3D Print techniques.

25

Players:

- Large industrial service shops largely own the machine shop space providing manufacturing services

across many techniques to small and medium size business and engineering & R&D departments.

Examples: VoxeLlet (3D), Plethora (CNC), 3DHubs (3D, CNC), Protofobs (.D CNC, Injection), Strotosv

(3D, Injection, Casting), Xometry (3D, CNC, Sheet Metal, Castino,

- Consumer services provide 3D print services and open labs to consumers such as hobbyists.

Examples: Fablab (Local Mfg), You3Dit (Distribited Mfq), Color fob (MAonaged MAorketplocr)

Shapeways (Opem Marketplace)

- eCommerce companies provide the marketplace for manufacturers and consumers to transact.

Examples: Kwambio, Unmade, Wivv, Shapeways, Kabuku


- Ownership of the value chain - Some companies seek to own the customer and the customers

experience, test out the equipment and usecases, or to decrease costs of selling equipment outright

(added service and training costs/barriers in the field). Examples: Luxexcel & BMF (Lenses),

Impossible Objects (Carbon Fiber, Glass, Kevlar)

- Incubator models - Companies are serving as incubators to help businesses design, print, sell, and

distribute (end-to-end) 3D Printed products to the end consumers. Examples: Flextronics, Dragon

Innovation

- Acquisition & strategic partnerships - As companies begin to realize the service business models are

reducing the cost of ownership and the barriers to printing while providing access to customers,

many acquisitions and strategic partnerships are taking place. Examples: Moog acquired Linear AMS,

3D Systems acquired Zcorp, Vidar, and 3DMe

- 3D printable inventory libraries - A new space just being explored are inventories of files ready for

3D Print, thus decreasing carrying costs of slow moving parts. Example: AMZ 3D Printable

Inventories of top selling items

End Users

26

Today there are a handful of prominent use cases of large corporations leveraging 3D printing. Though

typically these services are used for rapid prototyping, and less for production and repairs. There are still

significant barriers to adoption today and according to Sculpteo's survey, "Respondents show less

interest in buying a 3D printer, which means they prefer to use external 3D Printing services to produce

and manufacture their products." 26

Design &Supply & Materials Equipment Engineering SicEnd UsersManufacturers Software Providers

End Markets

The worldwide 3DPrint market usage is expected to grow (Now I Future)27

- 29% | 49% Aero/Auto

- 38% I 45% Plastics

- 29% | 43% Mechanical & Plant Engineering

- 27% | 42% Electronics

- 28% | 38% Pharmaceuticals & Medical

- 18% I 26% Consumer Goods Wholesale / Retail

- 14% I 22% Energy

- 10% I 16% Logistics & Transportation

Example Players

- Aerospace (GE / Siemens / NASA / US Army)

- Healthcare & Orthopedics (Stryker)

- Consumers & Mass Customization (Adidas)

- Automotive (BMW / Ford / Toyota / Caterpillar)

- Bio Medical (Mayo / Cleveland Clinic / Medtronic)

- Plastics (3M)


* Expect growth in market usage and application - According to Wohlers Reports, 71% of

manufacturers have currently adopted 3D printing techniques. What's more, 52% of companies

2 Sculpteo, State of 3D Printing, CY 20172 EY, Business Insider - All the Ways 3D Printing is Changing the World, September 2017

27

expect 3D Printing to be used for high-volume production with 3-5years 28 which is a very rosy

picture of the future.

e Still significant adoption barriers - There are still significant barriers to applying 3D Printing

broadly within end-user's production and supply chains, including long build times, high costs,

poor scalability, metal tensile strength, integration of dissimilar materials and parts requiring

manual production methods, and certification and testing of material safety, quality, and

durability.

* Capability acquisition - There has been an extraordinary amount of acquisitions and strategic

partnerships within the market looking to test out the advantages and applications of 3D

printing technologies.

ExC4m pi's:

- GE partnered with Dragon Innovation Service Bureau

- Adidas partnered with Carbon, leveraging CLIP tech to move from proto to prod

- Ford has partnered with Carbon

- Siemens took a stake in Service Bureau Material Solutions

- Aetrex acquired SOLS (custom insoles)

- Oerlikon acquired Service Bureau Citim

- GE has made many acquisitions to vertically integrate (Arcam, Concept Laser)

28

28 Wohlers Report, March 2018

CHALLENGES OF ADOPTION & FINANCING

Despite the hype and advancements within 3D printing and the promises of additive manufacturing

augmenting or even displacing pieces of manufacturing process has not fully been materialized, at least

not as quickly as many investors and founders have hoped. There are eight primary challenges that the

additive manufacturing industry must address to reduce the barriers of adoption.

1. Alternative techniques with economies of scale: Given the 11+ various print methodologies, most

techniques may have different approaches but overlap on use-cases, thus these companies with

various techniques must fight for the market based on their unique technique differences (i.e. SLS &

FDM), further splitting the market share.

Additionally, economies of scale will always limit the manufacturing application of 3D printing. The

reason being that 3D printing techniques are limited to printing a single object at a time. Other

similar digital fabrication techniques such as CNC milling (subtractive manufacturing) is still far

cheaper and quicker to produce objects. Lastly, when products can be quickly mass produced for a

one-time setup fee - die cast or injection molding will still be more advantageous for many

companies.

Exhibit: Economies of Scale29

Injection Molding vs. 3D Printing Unit Costs

$10.000 - - --

(mold cost) injection MoldingS10k for the mold-0.20/unit

$1.000-- - - 3D Printing

$20/unita.I-

Ii0 10001,0

U

UILw

I S00 1.000

# OF UNITS

29 Shapeways Magazine, High-Volume 3D Printing vs. Injection Molding, October 2017

29

Though companies such as GE are still finding economic benefits of 3D Printing. For example, General

Electric's fuel nozzles for Turbine engines - making them lighter and cooler through the ability of

printing ports within the object, allowing better overall operating economics by reducing fuel

consumption based on weight. Though GE does not need to mass produce these parts, to accomplish

this, GE has spent a significant amount of capital acquiring the machines and talent to operate them

- by having many simultaneous prints.

Exhibit: Economics of 3D Printing Substitutes 30

Processr tng at ar

3DPParts Starting at $95 1 to 50+ Parts

Low-Moderate [ to 50+ PartsFDM

SLA

SLS

PolyJet

DMLS

Moderate

Moderate

Moderate

High

Parts Starting at $65

Parts at $1,495 (Setup + Per Unit)

Parts at $1,495 (Setup + Per Unit)

1 to 50+ Parts

1 to 50+ Parts

1 to 50+ Parts

1 to 50+ Parts

I to 200+ Parts

25 to 10,000+ Parts

25 to 10,000+ Parts

2. Scale and print axis limitations: 3D Printed objects are limited in size depending on the printer and

material being used. Below is an example of the print limitations for a white plastic polyamide which

has a maximum size of 677 x 368 x 565 mm (roughly 2ft x 1ft x 1.8ft).

Exhibit: Maximum 3D Printing Sizes for a White Plastic Polyamide Object31

juI II I* I* II g

aFw*"P100

F00W*Pl5 e

osic

AAnIum esw 1 1 1iu 4ihmiw m n"I 1 O059 in

EOSPM9S

EosP730

IMiSO" 67!II.J

30 Protolabs, Service Quotes, May 201831 Sculpteo, Units and Size: Understand your 3D Printing Dimensions, December 2016

30

CNC

Cast Urethane

Injection Molding

In addition, print axis is a large limitation and limits the complexity of the print. Currently there is an

arms race to print in five and six-axis which will allow more complex prints such as complex

motherboards and PCBs, or computer parts that can curve around surfaces. However, increasing the

axis also requires significant advancements in the CAD software which will requires significant R&D

thus slowing down the competitiveness and rate to the market."

3. Issues with accuracy, precision, tensile strength and tolerances: The industry is still not sold on the

reliability of 3D Printing techniques. Currently 3D equipment manufacturers attempts to close the

gap thus far reach as much as 90% accuracy for printed objects. Objects printed that are not

'accurate' to design specifications occur when the materials quality is not consistent, print size is not

consistent (some print techniques require post-processing techniques to strengthen the object such

as sintering, which results in shrinking of the object), or there are just simply print flaws. Of course,

these do not occur in casting and injection molding techniques.

Interventions are still being designed today to increase the accuracy of prints. Specifically, within the

workflow management (MES) of a print machine. Several advancements in this area include visual

sensors and software that monitor a print and automates control to take corrective action real-time.

4. Not fully automated, assembly (still) required: 3D Printing still requires skilled labor. Whereas a

technician can queue up prints for production, all prints still require post processing steps which

require manual intervention and adds additional steps in the manufacturing processes which

drastically diminishes its value proposition. These vary depending on print type but can include

curing a print, polishing surface, cutting object from the print plate, and removing and preparing

print area for the next print job.

In addition to these steps, most prints today are not end products - they are commonly pieces for a

product that requires assembly with other objects to create a complete product therefore still

requiring assembly and not completely displacing the manufacturing process.

5. Lack of certified and tested material properties: As eluded to in accuracy and precision is the

durability of a printed products. This depends on the quality of the printing equipment but also

heavily dependent on the sources materials. Though generic commoditize materials like plastics and

resigns are available in the marketplace, if 3D printing were to integrated in production, an industry

32 3DPrinting.com, Why 3D Printers With 5 or 6 Axes Will Be the Next Big Milestone for 3DPrinting, March 2017

31

manufacturer would require a higher quality of material to ensure consistency, durability, and

strength. Materials with advanced properties are always proprietary and charge a market premium

which will be the main driver in higher operating expenses for a manufacturer.

A significant barrier to market adopters are that most of these new materials have not been

previously tested in the market for a long period of time thus exposing them to risk on how the

material will perform under pressure and the life of the product. Therefore, companies are unlikely

to adopt (i.e. printed metals for automotive or aerospace industries).

In response, materials companies have been applying certification tactics to help potential

customers get past this issue. These companies have uniquely been 'certifying' their own alternative

materials in the market for strength and quality (though similar properties to the commoditized

material) and reaping positive sales growth while commanding higher premiums.

6. Selling a process increases customer acquisition costs: The single largest expense for 3D Equipment

manufacturers is the customer acquisition costs. Startups and the industry giants such as 3D

Systems and Stratasys are spending an enormous amounts of capital to educate them on the value

proposition of 3D printing. Often these efforts require equipment manufacturers being in-house

with a potential client to conduct pilot programs and tests on which items in their production

process can be 3D printed. As a result, a company will need to further convince the customer to

change their entire production process, which requires very costly change management, and

process management - something manufacturers do not take lightly.

Given that 3D Printing is not just selling a product, but selling a process - sales requires a champion

within the organization which is open and educated on the advantages of 3D printing in their

processes. Once adopted, these will require a very specific skilled labor to install and operated the

new 3D Printed process which is a scarce resource in the market - often leading to a trend we see

with end verticals in the market making acqui-hires (bringing in the skilled workforce simply through

an acquisition of a company).

7. High implementation costs and risk of disintermediation: Companies that consider adopting 3D

printing techniques must weigh the cost and benefits of this new process. Included in the cost of a

new process is the machine costs, maintenance costs, facility cost and skilled labor costs. In addition

of the various 3D Printing techniques a company will have to commit to only one - especially during

a time where incremental advancements in precisions, accuracy, speed and post-processing is going

32

the incremental and evolutionary changes. In addition, some processes, like laser sintering with

powder-based materials to fuse the material together requires a lab-like environment to minimize

explosions and pristine ventilation. For these reasons, it makes for a very difficult decision for a

company to commit to such a significant capex expense and process & organizational change.

Another key consideration is potential disintermediation from competitors. Adopting 3D printing

techniques will leave companies susceptible to market attacks from competition. For example, given

a significant operating expense will be wrapped up in material costs. If a competitor were to acquire

your material suppliers, they will likely increase the prices to drive up your manufacturing costs

which will depress your margins or even force you to transmit the costs directly to their end

customers of their products by raising prices.

8. Powerful incumbents with deep pockets: Many of the novel 3D Printing patents have been expiring

in the past decade which has opened the market for new copy-cat products which has been poking

the incumbents of these original patents.

Currently the market for 3D printed equipment and corresponding software is dominated by two

incumbent companies who divide the market share, 3D Systems and Stratasys. These two were the

original pioneers to selling 3D Print machines to businesses since the early nineties through their IP

protected techniques. It has been very common for these two firms (especially 3D Systems) to

protect their space through heavy litigation - to drive a message for new rising competitors and

even forcing many to tie up their capital in litigation, resulting in bankruptcy.

In addition to protectionism techniques, incumbents with deep pockets have been consolidating the

industry for new incremental techniques that simplify their product offerings and increase the

speed, reliability, or accuracy.

For new entrepreneurs to win market share and scale is unlikely given the customer acquisition

costs. As incumbents control the customer and are well known in the industry - potential customers

will drive towards their products. Any new equipment startup in this space can hope for an

acquisition from two market leaders or from strategic end-users.

33

SYNOPSIS OF FINDINGS IN GROWTH FINANCING

The value proposition is still not strong enough. The value proposition is strong for end market users

(manufacturers) with advantages of meeting demand in a Just-In-Time (JIT) method there-by reducing

carrying cost, waste, and with in-sourcing can be printed and distributed locally - increasing the

efficiency of the distribution process for product orders, ultimately moving the supply chain closer to the

consumer.

The attraction of build-where-you-sell (i.e. insourcing) not only decreases distribution costs but lowers

the currency exchange (devaluation) and tariff exposure of the manufacture. Unfortunately, Additive

Manufacturing is a process change, not an equipment change, thus requiring significant organizational

and process changes. Lastly, today the equipment is not advanced enough to print complete integrated

parts, thus still requiring assembly.

For these reasons, in addition the absence of new techniques on the horizon that will grow the customer

base (aside from Desktop Metal), and current processes today leverage alternative techniques with

better unit economics (casting & injection molding). We are unlikely to see major advancements.

Investors only look for novel advancements in high margin business models: As we analyze the value

chain characteristics, the highest growth potential is solely in two areas with the largest potential profit

margins, novel material IP and design software. These two areas have the potential to produce returns

expected of a Venture Capital investments.

* Materials Business - 90% profit margins, but look for an already novel I.P., not simply a material's

shop. Often these IP's can also reside with a unique printing technique and also develop the

corresponding equipment. The key is to find a novel material that will increase adoption and reduce

barriers to adoption (i.e. increases tensile strength and prints resolution for metals), and unlock

recurring revenue to equipment manufacturers and end-users.

* Equipment Business - Very Low profit margins, eating margins include high cost in sales (including

marketing and distribution) and continued services for the equipment. All with overlapping

technologies vying for the same market share with subtle differences in technology and trade-offs in

value propositions. A company attempting to drum up market share here will effectively need to be

34

loss-leaders with the additionally threat of the incumbent's hard responses of litigate to set an

example for every new entrant.

* Design Software - 90% profit margins, with recurring subscription revenue model can fund the

carrying capital of a business, in addition being able to control the customer experience is optimal

and can compete not just on innovative advancements to test the market (new axis design, API

plugins and workflow mgmt.) but additionally there is a lot of room for advancements here and can

further compete on design and interface. After-all, most engineers within R&D are using CAD

software to create and visualize their products.

* Service Bureaus - Very Low profit margins with heavy capital costs, could be beneficial for PE growth

financing as they work to reduce the adoption barrier for small/mid-sized companies as Service

Bureaus help reduce the cost barrier but not at full production levels and therefore are unlikely scale

production from parts (single pieces) to complete products especially when there are alternatives

that are more economically feasible (casting & injection molding).

Incumbents will respond by protecting their turf: Today incumbents like 3DSystems and Stratasys are

heavily capitalized and are no-longer innovating and their original patents have long since expired,

opening the market to copy-cat alternatives to their techniques and competing for the same market-

share. For these reasons, incumbents today (and historically) have been protective of their market share

through steadfast litigation, likely to bankrupt a budding new company encroaching on their hard

fought, and very expensive turf. In addition, any novel advancements that will reduce barriers to their

products will be quickly acquired and removed from the market as the dominate players compete.

Through the past twenty years, these large incumbents have shifted their business models - from solely

selling through resale to owning the sales process, to offering service bureau-like services for potential

customers. The reason for this transition is largely in-part of educating the customer on the advantages

of additive manufacturing. Incumbents have learned sales and marketing activities is extremely

expensive and laborious process as they need to not only sell an equipment but an entire new

manufacturing process. This, of course, is the advantage for new startup entrants.

35

Industry end users will lead innovation and shop it in the market: The trend for the past several years

has been massive M&A activity for those companies that are looking to innovate their supply-chains

through additive manufacturing. Some in the industry argue they are paying too much, however given

large fortune 500 companies are well capitalized, this can easily be absorbed and still seen as a market

leader.

Given this shift in activity, corporate innovation is being brought in-house, closer up the value chain so

they can more easily experiment within their own supply chains and thus circumvent single equipment

purchases and service bureaus all-together through acquisitions of equipment and talent. Additionally, it

is expected that corporations will fully integrate their additive manufacturing needs all the way back to

the materials providers as to eliminate the exposure risk of disintermediation of the competition, thus

sabotaging their innovation advancements through acquiring their core materials provider (with the IP)

and driving up price.

As corporate innovations will never-the-less drive new requirements and advancements of materials

and equipment, it is expected that corporations will seek the market to develop solutions to their

Additive Manufacturing processes, also known as the "pull method". Leading the innovation in the 3D

Print industry will result in the equipment and materials providers to compete on price. However, this

will likely be a slow moving evolution process as corporate culture is typically cautious and well

measured.

Novel Advancements

Additive Manufacturing

The Additive Manufacturing ecosystem is largely going through an evolutionary stage in materials,

equipment, software, and business models - each aiming to reduce the barriers of production-level

adoption. Though there are still some revolutionary advancements that are expected to gain buzz in the

area of 3D Printing, for example;

e Advancements in metal printing - Currently the company Desktop metal is generating a lot of

buzz (though no sales, yet) with their new techniques in metal printing. Desktop metal promises

100x reduction in costs, 10x the print speed, and increased strength, resolution, and reliability.

36

e Integrated material techniques and PCB chipset advancements - New processes have been

coming out on pushing out print capabilities for integrated materials. Given the day when

assembly will not be required for multiple materials by integrating plastics and conductive

materials, new applications can be profound, especially in PCB Chipsets.

* Applications in construction, new materials on additional axis - It is very plausible that 3D

Printing can begin having a significant impact in the construction business. New advancements

in materials quality and more flexible techniques can allow for uniquely printed structures (ex.,

curves). Though unlikely to totally displace construction techniques anytime soon but may first

evolve into printing certain inputs on-site, reducing high logistics costs.

Mass Customization & New Marketplaces

Not all breakthrough technologies in 3D Printing will apply to the manufacturing marketplace, therefore

reducing many of the adoption challenges within the market. Through Mass Customization/on-demand

print services, custom anything that brings the supply chain closer to the consumer will be a significant

advancement in the industry, the following are several areas showing promise today;

Mass Customization

" Biotech - Further advancements in driving healthcare advancements that printed objects are

unique to the consumer, whether it be cell based organ or bone-like structures. There is without

a doubt a large market, however limited by the slow regulatory FDA testing and approval

processes.

e Printed Food - Today several startups are printing hamburgers to customized pastries with

designs. There is potential that other food alternatives may be printed for novel and

personalized enhancements to your dinning out experiences.

New Marketplaces

* Printable File libraries - As printable file libraries become more accessible, this can drastically

reduce the need for companies to keep slow moving assets on-hand while incurring high

carrying costs. For example, emergency repair parts on a freighter, or automotive parts

replacements for expired, vintage models. This will only require either access to a local fab-lab

print facility with a print-per use and service charge or a company owning the 3D Print

equipment in-house.

37

CONCLUSION

Much like the relationship with Venture Capitalists and Clean-tech, we cannot expect an economic

windfall in Additive Manufacturing. While there are many skeptics 3D Printing will break out of

prototyping and pre-production processes, there are, however, many others that believe that 3D

printing is enjoying a new renaissance and is currently at an inflection point.

The largest underlining deterrent to market adoption is the simple fact the industry is not only selling

enterprises a machine or service - but rather an entirely new design and manufacturing process all

together. Additional adoption challenges including:

1. Alternative techniques with economies of scale

2. Scale and print axis limitations

3. Issues with accuracy, precision, tensile strength and tolerances

4. Not fully automated, assembly (still) required

5. Lack of certified and tested material properties

6. Selling a process increases customer acquisition costs

7. High implementation costs and risk of disintermediation

8. Powerful incumbents with deep pockets

In addition to just overcoming these challenges, for companies to secure growth funding - they will have

to consider the following market forces.

1. The value proposition is still not strong enough

2. Investors will only look for novel advancements in high margin business models

3. Incumbents will respond by protecting their turf

4. Industry end users will lead innovation and shop it in the market

Although 3D Printing is unlikely to revolutionize additive manufacturing in the near future, there are still

some novel advancements investors should take a second look at for opportunity and return.

1. Advancements in metal printing

2. Integrated materials techniques and PCB chipsets advancements

3. Applications in construction, new materials on additional axis

4. Mass customization in the way of bio-tech and printable food techniques

5. New marketplaces and printable file libraries

38

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40

Exhibit: Additive Manufacturing Ecosystem Research

:Standard (ABS, PLA)Special (bIn, TPE, Fu Color, Acryic)

*Emlc (Wood. Gypsun, Carbon Fiber)- Metal (Bronzo, Copper)*Enaling Mterials- 88% Ptaics- 35% ResinsS28% Metls-15% licoor/Suodshorre- 11% Wao-8% Ceramic

*Thir Party providersMapudo (Materials Mrkelplace)

- Verbatim (Materials Marketplace)- DMakers (Plastcs)- Carpente Tehnooges (Metas)- Advenced Powders & Coalngs (Metals)

*Advanced Meterials- Verids3D (Moed)- MdeSolid (Plasics)- Malerialize W Adhesivesy- Mtalysis (Molas)- NanoStel (Metals)- Seriforge (Carbon Fiber) - Ows Equipment I Senice

- Forecasts indicate gobal market for 3DP metals wilbe $128 by 2028

* Consolidetions with Meterial Providers- Carpenter Technology I Purus (access to tltariun ponder)

- Acquistions for Materials Advantages:- GE / Advnced Powders

* New Material Breakthroughs:-3D prining with polymer-derivd ceramics-3D prining of polymer-bondd magnets

- 3D4Makrs devloped Facilen C8, producing the smoothest FDM surfaces- Discord high-slrength aluminiurn alloys us by SLM- Many continued breakihroughs in Biomed- Researchers hase 3D printed fuly functonal circuits containing dff rmaerials

- Many metal providers develop equip to serve the one material- Thereby owning thuesou chain ivo the new IP

*D-etdsp A 10-tmu (Equipmsent <-090

* cndrls Equipment-3D Printers (FOM, SLA, SLS, PyJet, DMLS)- ONO (MIs, Lathes, Waterject, EDM, Laser Cutter)

- njection Moding-Dtal Kniting & Sewing-POD Printers

. Consua-u Equip anfcturers- MakerBot (Stralasys)

R- oPrinorBot

.e dustrial Equip Mbradnu urers-3DS (SA & SLS machines)- Stralasys (FDM machines)- EOS (SLS & DMLS mschines)

- Carbon3D- VoeUel

. Specie.ized Equip anufisturers,-Arcam (Adenced Powders)- Luesel (Lenses)- Q8t (Proprietary Meal Iiqet)-Derkop Metal

*New Entrants- Toshiba-Koak

*62 nfg sold indsirial-gradi AM systems (grew from 49 in 2014)-20 U.S. vg soid lnduslriai-grade AM sys (grew from 5 in 2013)

* 50000009 & DtibziaitnSOnline database (and crood source)- Mass customization (fle design & price)

- Traditonal CAD sodkwre* Control Sothoare for AM systems-Topology Clinizabon

-CAD Designs & Rendering- Malerialse-Ro- PrinrBol

*Workflow Mgmt. & tMES- SAP- Aultenize- Carbon 3D

.CrowSourcing- CAD Croxid- DesignComd

- uirky

- Neow sreantined process enable rapid prootoyping sa 3D nano-nig

- Equip Mfg sole-source & supply materials for belter margins - Designers prter to stay close to equip sg. & Sun.- Make Printable partnered with 3D Hiubs & Shapeeoys Service treaus

- HPJut dekelped pipenetfor newaterlIs equip, diet. for prod equip - Poar3D partnerod Wts FashForge Equipment- Bot Skalasys and 3D Systems hoe roade significant bNz lately about product - Zoerse partnered with 3D Systems- So toe race is now on vn. HP Wo is now going for Prodocitn not prokodype,- Sralasys' eaclsive contracts with toe major reselers make it chalenging for HP - Consolideton to retain competitive advantage

- AuhiDesk acquired Netfabl- Equip Wg. Acqufrlg For Gesater Matte Advantage - DesignBay acquired DesignCrod.corn

- Equip in Shderng Consumer Market (Skasys / Makerbot)- Design in Goong Consumer Market (Makerfot / Thinerse)- New Industial Materials (Arcarn / Admnced Powders)- Aurora Labs paners with engneering firm to boost sales of metal printers

- New Techniques & Processes- Rapid Plasma Depositon (Norsk)- Blue Laser (Nuburu)- Auto Pat Rmororr (WPro)- Mtiple Mealts Print (NVLabs)- Post Processing (PoslProcess Technologies)- Fier finish: Cartons CUP technology

- Service Bureaus one Investing to Streaudine Processes- Rapid Manufacturing - eRapid Plugin (Streamline design to quole hi prod)

Shapeways - Upload API (enables applications to subit 3D models to the markPiethora - CAD Add-in (Instant feedback, pricing, and MES)Sculpteo - CAD Cloud (wordlow autiomalln, sched. jobs, oplhrize capacity)NVPro - Cloud dl(worlow utormaton, sched. jobs, optinize capacity)

* ksduastrl & Nos-Idustl Scale- Disributed Naletrks

- Managed Ntorks- Open Ntworks- eCosrmarce

* Service BureausDesign & SoloeMacfinig & Piestng (3D, CN Mod)Managed/Distributed NetsoeCommarce

" Large Industrial Services (Most owning the suppy chain)- Votet (3D)- Plethora (CNC)-3D Hibs (3D, CNC)- Prokokabs (3D, CNC, injecion)- Staasys (3D, Injecion. Casing)-Xoroey (3D, CNC, Sheet Metal, Casing)

* Consumer Serices- FabLab (Local Manufacuring)- You3Dt (Distributed Manufacturing)- ColorFe (Mangaed Markiplace)- ShopevAys (Ope Marketplace)

"eCornmnerce- Komecbio

UnmadeWiwShapeesysKabuku (MES, Distributed, eComsarerce)

- Business Models eeist to reduce cost barrers for Industrials

- Souse uudeo keep IP cksse by owning entire vahe chain:- Lusscel (Lenses)- Impossible Cbjecis (Carbon Fiber, Gss, Keolar)

* Others Service as incubstors across the entire value chain:- Fletronics (End-b-End Incietor)- Dragon Innomsbon (End-o-End incubaor)

* Many Acquisittons & Strategic Partnerships-3D Forify parlinered with Alodesk, ANSYS, SoldWorks-3D Systesn acquired Zmorp. Vtder, 3DMo (repicas)

- - Juncion3D acquired Maikeir.1- Moog acquired Uner AMS

SOpportunities- AMZ creating dgilal 30 printable irieciries to enhance top soling items

Repid Prottyping, Repai, liouanfturing

- Worldwide 3D Printing Market Usage (PN/ow vs. Future)- 29%1 49% Aerc/Auko- 38%145% Plaslcs- 29% 143% Mochanical& Plant Engineering- 27% 142% Electronics-28% 138% Phernocourttodoa & Medical-18% 26% Consuro oods Wholesale etaed- 14% 22% Energy- 10% 16% Logistics & Transportation

Ed Markets / Active Market Moves- Aerospace (GE / Siemens I NASA / US Army)- Hearoore & Ortlopedics (Stryker)- Consumrers & Mass Custimeaon (Adidas)- Aulimfi (BMW / Ford / Toyota / Caerpillar)-BiooMedical (Mayo / Cleyeland Clinic / MedIronic)

71% of manufacturers hae currenty adopted 3D Printing -Whirs- 52% expoct 3DP will be used for high-olkume prod outhin 3-5yrs -Wi*s

22% predct 301P sIt ham a dsrupi effect on supply chains -Whirs

*Many Acquisitions & Strategic Partnerships- GE parnered wth Dragon Innovtion Service Bureau- Adidas panters with Carbon, leveraging CLIP tech to move from pros to prod- Ford has pamered vith Carbon- Siemens took a stake in Service Bureau Material Solutons- Aerex acquired SOLS (cusm insoes)SOerikon acquired Service Bureau Cintm- GE has made many acqsiteons to verticaly integate (Arcam Concept Laer)

- Adoption Barriers- Long build tmes, high cost and poor scalabilly

Materiel costs in the supply chain Is key driver of high-costs- Metal strengh (for airplans fuel lanks, nuclear power plant pressure oubes)integrating dissiitar maerials for interconnecing active cormponents

- Muli-Material printing wil eliminate assently of products- Successful adoption of metalic AM in avaon wil require investment

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financing for growth in additive manufacturing

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