Interview: Arno Held of AM Ventures on investing in Additive Manufacturing

Munich is hub of additive manufacturing activity, therefore it should be no surprise that one of the leading specialist investors in 3D printing is based close to this city in Southern Germany.

AM Ventures Holding GmbH (AMV) makes strategic investments in advanced manufacturing and across many areas of the 3D printing industry. The company has a stated objective to “build scalable value chains that enable serial production of advanced applications”.

Initially established with support from additive manufacturing market leader EOS, AMV has a portfolio of investments focused on disruptive applications. Investments include software with 3YOURMIND, post-processing from DyeMansion and Exmet AB – a company using additive manufacturing to work with amorphous metal alloys.

Earlier this year our readers voted AM Ventures as the Investor or Professional Services Company of the year in the 2018 3D Printing Industry Awards.

3D Printing Industry caught up with Arno Held, Chief Venture Officer at AMV, to learn more about how to get your 3D printing start-up financed, what venture capital firms are looking for in the additive manufacturing industry and where opportunities for innovation still need to be filled.

3D Printing Industry: How would you describe your role at AMV and what is the purpose of the fund?

Arno Held: AM Ventures Holding GmbH (AMV) is a strategic investment company with the purpose to sustainably grow the Additive Manufacturing industry. Our specialty is Advanced Manufacturing in general and Additive Manufacturing in particular. This narrow focus on AM and a strict commitment to synergetic investments is what differentiates us from the conventional venture capital industry.

Our main USPs are the extensive experience of our team in AM engineering, production and executive management as well as our network in the industrial 3D Printing world and the excellent ecosystem of companies we have built so far.

As Chief Venture Officer I am responsible for the venturing value chain activities all the way from scouting new start-up companies to the investment management of the portfolio members. My team comprises of 6 highly talented and super motivated colleagues focusing on different technology fields such as materials, hardware, software, applications and manufacturing.

3D Printing Industry: Why does the 3D printing industry need an enterprise like AMV?

Arno Held: In the Additive Manufacturing industry today, most large companies focus on growing their piece of the AM pie. Our mission, however, is to grow the entire industry and accelerate the adoption of AM in the industrial context. Industrial AM has a great potential but still many challenges are not yet solved. There are a few venturing companies who are ready to invest in our industry but only very few of them have the in-depth know-how to evaluate AM-related business ideas in a very early stage. We are proud to have many decades of experience in additive manufacturing within AMV and even more in our ecosystem of portfolio companies, advisors and trusted partners. We can confidently say that there is hardly anyone else who is able to evaluate a company in the AM industry as well as we are.

3D Printing Industry: Can you tell me more about how you make a decision to invest in a 3D printing start-up? What is your time horizon for an exit/ROI?

Arno Held: We are putting high effort into building up a synergetic portfolio of companies. This means, we invest if the portfolio benefits from the new investment and vice versa. This enables us to increase the value of our existing investments with every new acquisition. The final investment decision is being made by our investment committee which consists of the AMV management, our shareholder Dr. Langer and a few selected advisors.

Once we have made an investment, there is of course a certain expectation in terms of growth and success. However, as we are quite experienced with high-tech development, we know that there is a different set of resources, skills and patience required compared to classic software start-ups.

3D Printing Industry: Have you noticed any particular trends over the recent years in the type of companies making pitches? For example, are you seeing more ventures based around software, applications or hardware?

Arno Held: Yes. Much like in in any other industry, trends come and go. A couple of years back, there was quite a trend in Digital Rights Management and software platforms, and then came topology optimization. Eyewear start-ups were rather hip last year and this year it seems as if – finally – the first real high volume industrial applications are on the verge of a breakthrough.

Overall, we can say that we are noticing that the educational quality with regards to AM has improved significantly. Compared to the industry five years ago, young entrepreneurs know 3D Printing and its opportunities way better and they also know exactly how to overcome the limitations. The coming years will be highly exciting for engineers.

The pilot production chain at Premium AEROTEC in Varel, northern Germany. Photo via EOS.
An example of high volume industrial applications and processes. The pilot production chain at Premium AEROTEC in Varel, northern Germany. Photo via EOS.

3D Printing Industry: Are there specific challenges in AM that you would like to see more enterprises tackling? If so, what are these?

Arno Held: What we see is that the need for advanced applications is rising. It seems that users of Additive Manufacturing technologies still lack success in identifying new disruptive applications based on AM beyond just replacing existing ones. This is a great challenge and calls for smart people to develop new applications tailored to AM. That is why we do not only focus on hardware, software and material enterprises, but on applications as well.

Some start-ups have realized that the true value of AM can be created when end-use parts are being redesigned from scratch. Then the true engineering magic happens. Larger corporations might have the funds and resources for this but are mostly lacking flexibility. This is the big advantage of start-up companies. Forget about what has been there and start over. Highly dynamic scrum teams which are detached from a rigid organization bring new creativity and a different level of innovation to the big industrial players. We know that this requires new skill-sets in and around materials, manufacturing and applications development, but this is exactly where AMV can very well support.

3D Printing Industry: Combining hardware, software and material/chemistry expertise, AM is a sector with many moving parts, and potentially risk. The software industry has been a primary focus of investors in the past, possibly due to (and this is a gross oversimplification) the ability to scale via leasing additional bandwidth/computation power. How do you view the wider investment community’s appetite for start-up investments that are not specifically focused on software and how is 3D printing viewed by that group in 2018?

Arno Held: Indeed, cost, dynamics and scalability in software are different than in hardware technology. A couple of years back we saw that large software VCs started to make the first investments in AM.

Of course, these firms have certain expectations when it comes to growth and monetization of their investments. These expectations are benchmarked against the performance of digital companies. This becomes a challenge once investors realize that industrial hardware works differently. It requires much more patience and a different set of knowledge and network in order to create synergies.

However, we see funds and corporate venture capitalists starting to invest in technology based AM startups today as well. Especially in the US, we are seeing how ticket sizes and valuations are becoming bigger and bigger each month. This is an impressive development and certainly a good statement for entrepreneurs at the point when they raise the money. However, this also indicates investor’s expectations for the future and the kind of pressure that will be on the teams in order to meet the numbers and keep their promises.

Radial engines colored with DyeMansion DM60, 3D printed in PA2200, blasted with DyeMasion Powershot S (10 min). Photo by Michael Petch
Radial engines colored with DyeMansion DM60, 3D printed in PA2200, blasted with DyeMasion Powershot S (10 min). Photo by Michael Petch

3D Printing Industry: Munich, near where you’re based, has become a hot-spot of AM activity. What would you attribute this to?

Arno Held: Generally, Southern Germany is a fantastic breeding ground for high-tech, hardware and all kinds of engineering disciplines. Examples thereof include not only large blue-chip tech corporations such as BMW, Daimler, Siemens and many more, but also a large variety of small- and medium-sized world-leading corporations being at the forefront of their industry. In combination with world-renowned technical universities in Karlsruhe, Stuttgart, and Munich, amongst others, there is a great basis for long-term success.

Munich in particular is the home of large industrial companies and also birthplace of EOS, the leader in polymer and metal AM. The company was founded here almost 30 years ago. Ten years later, Voxeljet was founded just outside of Munich.

Five years ago, I was part of the team that established the 3D Printing Cluster Initiative which is now known as MUST3D, a network of a couple of hundred 3D Printing enthusiasts who meet every 6 months in order to update each other on the latest developments in AM.

In more recent years, the proximity to talent and large potential customers encouraged also other industry players such as GE Additive and Oerlikon to open subsidiaries in Munich. Last but not least, successful AM startups and AM Ventures portfolio companies like DyeMansion and Vectoflow have their head offices in the city.

On top of this, Munich has a very active scene of excellent high tech investors such as B-to-V and UnternehmerTUM VC. Additionally, the local infrastructure provides great start-up support through the entrepreneurial centers of TU Munich, LMU and the Munich University of Applied Sciences. Especially UnternehmerTUM, Europe’s largest entrepreneurial center, provides a great boost to tech startups of all kinds.

I think the local AM ecosystem in Munich is unique and there is no better place from a global perspective to set foot in the AM industry…and AM Ventures is always open to support cutting-edge entrepreneurial initiatives that help AM technologies and applications to become the industry standard of tomorrow.

You can track investments and M&A activity in the 3D printing industry here.

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