Additive manufacturing and 3D printing – Luda Kopeikina

This blog is an Innovation Insights video podcast transcript. In this episode Emerald’s Investment Director Neil Cameron discusses ‘Additive manufacturing and 3D printing’ with Luda Kopeikina, Investment Director at DSM Venturing. Click here to watch or listen.

Technology Transition towards a Better World – Additive manufacturing and 3D printing
Neil Cameron: Welcome to Emerald Innovation Insights. I’m Neil Cameron, and today we’re discussing additive manufacturing, often called 3D printing. Joining us today is Luda Kopeikina, she’s a pillar of the DSM venturing team and a prolific investor in this space. Luda, welcome.
Luda Kopeikina: Thank you.
Neil: So what I’d like to begin with is a comment that additive manufacturing has come a really long way from the foundational IP from the mid 80s, when it was just a curiosity for the polymerization technology patents which were developed in Japan to where we are right now. There’s been a huge path, and I would argue that in the last maybe from five years, there have been some pretty powerful paradigm shifts. But I’d be curious to get your perspective from the front lines of corporate investing in this space, what’s changed or what is changing in additive manufacturing today?
Luda: So, we started the additive manufacturing unit within DSM in 2019. Why? Because we see that there is a potential right now to get 3D printing into industrial manufacturing, not just toy production manufacturing. The reason being that materials were at the core of that, and there was not enough of them, and there’s still not enough, the broader set needs to be created. But certain materials exist that can be 3D printed, and there are printer technologies that now exist to also 3D print in time, at cost, that is required for industrial production. Those are the changes that are still not fully there, that will need to be accelerated, and the digital platforms and the like, will need to be created, digital tools, to accelerate that trend. But it is possible now.
Neil: That’s actually… Yeah, I would tend to agree. I think that this has been sitting in gestation for so long, but there’s… There are important drivers that are making this whole space move, finally now. And to your comment about, “We need more deals to look at,” I would… You and I have, in parallel, looked at lots of deals. We haven’t looked at a deal together yet in a co-diligence process, but in parallel I know that you and I have looked at a number of deals and I’ve frankly fallen in love with virtually all of them. It’s not easy… It’s not hard to fall in love with additive manufacturing technologies. We’ve been challenged with finding opportunities that can deliver a path to a venture grade exit in our time frame, as an institutional investor, our time frame is quite short, your time frame as a strategic investor is a little longer. You’ve found five that you’ve fallen in love with enough that you guys want to put the DSM brand on it and say, “This… We’re invested here.” Any you’d like to highlight? Maybe you’d like to give us a quick, little summary of what caught your attention with the five you did.
Luda: Right. So yes, there are five, two of them in the material space. One of the major needs in the 3D printing market is soft material, and soft materials that are non-brittle, that essentially creating… Taking polyurethanes that are good but not 3D printable. So chromatic specializes in that. Then there is adaptive that challenges the materials like of carbon and produces materials that are even better than carbon, but they can be produced at the speed of industrial production versus the carbon that has certain constraints on the time to print. So, we have the chromatic and adaptive investments that are in the soft space that is very needed. 60% of the labor and time goes into post-processing, not a very well-known fact. 60% of the cost of the part, it’s a lot. So we invested in a company called AMT out of UK that takes it, automates it, and actually makes the part shine and reduces the problems with it essentially. So, it’s a tremendous technology that we really, really put into this very much. Then we believe in certain verticals for 3D printing. We think that shoes, athletic shoes, will be 3D printed. And so we invested in Voxel that has a particular technology with soft materials, and they are creating an industrial platform specifically for printing the top of the athletic shoe in one go. Then we invested in Inkbit that’s a future of, I think, industrial production. Their claim to fame, they’re out of MIT, and their claim to fame, they’re doing quality control at each layer as it being printed so they can adjust. And so, they can print in minute detail very fast. What’s the fourth one? So yeah, so we… Those are the differentiated ways. Yeah, they go in sync with our belief of where 3D printing will actually bloom.
Neil: Yeah. So I’m a materials guy, so obviously you’re tugging all my heartstrings if you’re gonna talk about interesting materials being used in additive manufacturing. The kind of deal that I get tired of is the one where the companies are showing me pictures… Showing me copies of the Eiffel Tower. And I don’t need to see more copies of the Eiffel Tower, what I need to see are parts which actually have function. And the value proposition of tailoring a customized part for the interface with the human body is a great, great, great opportunity, I entirely subscribe to your thesis of shoes. It’s not necessarily totally obvious but having shoes that actually fit your feet is a strong market and quite an interesting place to be. Let’s just change gears a little bit quickly here, because one of the things that we need to see and you need to see are exits. It’s all well and good to see interesting technologies, and it’s even better if you can see technologies that can scale. But if you’re exit-oriented, if you’re interested in a financial return for an investment, you need to see a path out. And there was a wave of exits eight years ago or so, but it’s been awfully quiet since. Any views on that from the frontlines or any… Do you see any exits in the near term that you’d like to highlight?
Luda: Yeah. I think the industry is rethinking itself. I think that because of the fact that materials and processing and the application have to come together as a three-legged stool, a lot of the printing companies were trying to do way too much. They were trying to do the material, the printing, and be knowledgeable in all the applications, and there were also the service bureaus that were created. So, it is going to actually go in different directions, I think. And that’s maybe one of the stalling factors for the exits, because the industry needs to understand where is it that the focus needs to be for each company? So, I’m not really particularly upset about this, and I also hear that the metal 3D printing are going IPOS and the like, the digital metal, so it will be happening. And I think… And also, as a strategic investor, we nurture these companies and we know how to help them to actually get the traction they need to raise the next round to exit very properly. So, it is a difficult thing in some sense, but I’m actually very excited about the potential for our portfolio.
Neil: I share your enthusiasm for this space and I can’t help but tip my hat to your portfolio and your companies.
Luda: Thank you.
Neil: Let’s just… For a final quick little question here, let’s talk about tailwinds, because one of the things that we need to see for decent exits is rapid growth, and an unlikely contributed rapid growth may well be this COVID pandemic in which we are currently living, right? It has negative impact on health, it has negative impact on global economies, it has a negative impact on technology adoption generally. But in additive manufacturing, maybe it is a special case, and I wonder if you can -if you have any thoughts on how COVID, this current COVID crisis may actually have a positive impact on additive manufacturing.
Luda: So what COVID did for 3D printing is put 3D printing on the pedestal and demonstrated that it is not a toy and they can print… The 3D printing groups can produce things on demand and very quickly and to the specs of the hospitals. So, the first things that were produced were the swabs for testing, then masks were printed. A lot of those things have emerged, so we now have proud owners, of essentially almost two business, new, two business units in DSM supporting Netherlands and Europe for masks and those swabs. But one of my portfolio companies, Adaptive, is also working with a hospital on those swabs. So, it’s yeah, it is an acceleration and demonstration that 3D printing can actually be industrial and can produce in mass and can produce too quite quickly. So, I hope it’s a demonstration and there’s more focus on the investment and more technology that will go in 3D printing.
Neil: I hope you’re right, I also hope that additive manufacturing demonstrates some real decentralization of manufacturing capabilities for global manufacturers. It should be quite interesting times and we shall watch it very closely. Perhaps we’ll find a deal to do together soon that will make it really happen.
Luda: Yes, absolutely, yes.
Neil: Luda, thank you so much for joining us for this edition of Emerald Innovation Insights. We do appreciate your input. It’s been delightful. Thank you.
Luda: Thank you. It was a pleasure