Zetwerk raises $150M to become on-demand manufacturing unicorn

The nominations for the 2021 3D Printing Industry Awards are now open. Who do you think should make the shortlists for this year’s show? Have your say now. 

Digital manufacturing service provider Zetwerk has become India’s latest business unicorn after raising $150 million, taking its total value to $1.33 billion. 

Led by U.S. hedge fund D1 Capital Partners, the company’s Series E funding round was supported by new investors Avenir and IIFL, along with existing backers Greenoaks Capital, Lightspeed Venture Partners, Sequoia Capital and Accel Partners.

Leveraging its newfound capital, Zetwerk plans to invest in new technologies as well as expanding its global reach, with the aim of better addressing those Western manufacturers encountering supply chain instability during the pandemic. 

“Zetwerk is helping enterprises navigate the shift to digital manufacturing amidst rapidly changing global supply chains,” explained Amrit Acharya, CEO of Zetwerk. “Over the last year, more than 100 western companies have moved their supply chains to India via Zetwerk, across industrial and consumer products.”

A map showing Zetwerk's current bases of operations.
Zetwerk currently operates in 15 countries, but is now seeking to expand into more. Image via Zetwerk.

Zetwerk’s manufacturing network 

Founded in Bangalore four years ago, Zetwerk is a rapidly-growing on-demand part manufacturer, with clients in the aerospace, automotive, energy and oil and gas sectors. The firm offers injection molding, sheet metal fabrication and die casting services among others, via an extensive network across 15 countries, with much of its demand originating in the Indian, Chinese and Southeast Asian markets. 

In terms of its additive manufacturing portfolio, Zetwerk is understood to already have 3D printing capabilities, yet it hasn’t publicized the extent of these. At present, the company markets 3D printed wax pattern prototyping services, though it’s now understood to be expanding its technology stack, as a means of striving for international growth. 

During FY 2021/22, Zetwerk reportedly generated $128 million, while turning its EBITDA positive without spending a huge amount of capital. What’s more, the firm is also said to have increased its Southeast Asian and North American market share, which has seen it become attractive to investors, and double its valuation from the $600-$700 million it was valued at after its last funding round in February 2021. 

“In a short period of time, we believe Zetwerk has become a leader in delivering fast and cost-effective manufacturing solutions to companies globally,” said Jeremy Goldstein of D1 Capital Partners, “[and] accelerated the pace of digital transformation in a very traditional industry.” 

Conveyor galleries, junction houses, structures for electrical sub stations produced by Zetwerk.
In the past, Zetwerk has manufactured conveyor galleries and junction houses for electrical sub stations. Photo via Zetwerk.

Entering the Western fray? 

Although Zetwerk now has the funding to compete in Western manufacturing markets, its entry would place it into direct competition with some of the sector’s established players. Xometry and Hubs, for example, have managed to corner the industry’s more professional clientele, while Protolabs has invested heavily in its CNC machining portfolio, making it a difficult market for newcomers to buy into. 

Much like Zetwerk, Western service providers have also benefited from a surge in investor interest over the last year, thus they too have accrued huge amounts of capital. Xometry, for instance, went public on the Nasdaq stock exchange in June 2021, raising around $252 million in the process, meaning that Zetwerk won’t necessarily be able to outspend its Western rivals, should they cross paths in future. 

Over the last year, several 3D printing firms have agreed to merge with Special Purpose Acquisition Companies (SPACs) as well, with more than $15 billion worth of deals in the offing. As a result, firms like Fathom, Fast Radius and Shapeways also look set to gain a combined $720 million worth of capital, providing them with the spending power needed to fund expansions of their own. 

Carbon 3D printers installed inside one of Fast Radius' microfactories.
Any expansion westwards could see Zetwerk enter an already fiercely-fought 3D printing market. Photo via Fast Radius.

Fast Radius, which is set to inherit $445 million worth of this windfall, has already committed to spending its share on funding future growth, with the aim of achieving revenue of $635 million by 2025. Likewise, Shapeways’ SPAC merger should see it raise $195 million, with which it’s planning an expansion of its technology and material offerings, and targeting revenue of $250 million by 2024. 

However, the crowded nature of the on-demand manufacturing space has already put a dent in Shapeways’ revenue ambitions, with the firm’s income falling below expectations in Q2 2021. While the company has indicated that it’s pressing ahead with its upcoming merger, its difficulties suggest that the market could well be on the verge of oversaturation. 

Consequently, Zetwerk’s investor backing and upcoming expansion are no doubt based on significant revenue growth within its domestic markets, but it’ll have its work cut out if it opts to compete in the increasingly well-backed Western manufacturing space, where there already appears to be numerous firms competing for the same clientele. 

The nominations for the 2021 3D Printing Industry Awards are now open. Who do you think should make the shortlists for this year’s show? Have your say now. 

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Featured image shows one of Zetwerk’s manufacturing facilities. Image via TechCrunch.