No matter how much I hear about 3D printing, the potential applications never cease to amaze me. From food, to guns, to jet engines, this booming technology has the potential to disrupt an incredibly wide range of markets.
Real estate blog Movoto recently toyed with the idea of printing an entire house using MakerBot’s Replicator 2. Of course, the time and expenses required to do so are far from practical using current technology – the blog estimated it would take over 220 years and $330,000 to build an average sized home with a single Replicator 2.
But that doesn’t take away from current applications and the booming 3D printing market.
Also known as additive manufacturing, 3D printing has actually been around for almost three decades now. However, the technology has historically been used in an industrial setting – not until recently has 3D printing made its way to the consumer market.
The Catalyst
Amazon (NASDAQ: AMZN) recently kicked open the doors to commercial 3D printing by devoting an entire department to the technology.
Upon opening, Amazon’s 3D printer store only included what can be considered low-end printers. However, MakerBot’s Replicator 2 was quickly added to the lineup, significantly raising the legitimacy of Amazon’s new service.
MakerBot is the top contender in the consumer 3D printing market right now. Founded in 2009, the company has already put over 15,000 printers in the hands of engineers, designers, and interested consumers.
Makerbot has just about everything going for it right now. The company’s Replicator 2 was named the best 3D printer by Time, and for good reason. The device offers a user friendly interface, 100 micron printing resolution, and a build volume of 410 cubic inches.
The company has focused on the niche market of entry-level users and is doing incredibly well as a result. It pulled in an estimated $10 million in 2012 revenue and is projected to boost that number to $50 million in 2013. Currently, Makerbot is being valued at $300 million.
The only apparent bad news about Makerbot is that the company is currently operating privately – a major letdown to interested investors. However, with the current momentum behind Makerbot, it won’t be long before related investment opportunities become available.
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Going Public
As long as natural progression follows its course, one of two things is going to happen: Makerbot will either announce an IPO or another 3D printing company will acquire Makerbot to gain access to its consumer market.
Makerbot holds a strong 25 percent market share and recently began acquiring patents for its technology. This is incredibly telling because Makerbot was initially a proponent and user of open source software.
Makerbot’s procurement of intellectual property shows the company has evolved towards a more business-minded model. Makerbot’s current investors stand to make large profits from an IPO or acquisition – and there is little reason to go in another direction.
As far as pure plays are concerned, there are very few 3D printing manufacturers on the market. Stratasys (NASDAQ: SSYS) is among these players, and it is the most likely to acquire Makerbot.
Stratasys currently focuses on high-end industrial 3D printers. The company’s technology is especially useful for prototyping. You may have recently heard the hype that a working gun was built using a 3D printer – that gun was built with a Stratasys machine.
Likewise, Makerbot is focused on prototyping as well, having consistently targeted entry-level designers and engineers. An acquisition of Makerbot by Stratasys would provide the latter with access to a new market, which would feed into its current operations.
Rumors have been circulating that Makerbot and Stratasys are already in talks about an acquisition. If this happens, expect a short wave of increased valuation followed by potential long term growth.
Turning progress to profits,
Jason Stutman
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