Carbon Becomes the Most-Funded Private 3D Printing Company to Date after $260M Growth Funding Round

Carbon, the first company to establish a subscription-based offering for its additive manufacturing platform, closed a US$260 million growth-funding round to fuel its international expansion in Europe and Asia; accelerate software and supply chain objectives; and drive greater product, marketing, and sales cohesion. This brings the Silicon Valley startup’s total fundraising to north of US$680 million, and now it needs to deliver.

The company’s subscription offering includes hardware, software, and service. Annual contract value per unit is about US$70,000 per year for entry level printers (M2) and US$210,000 to US$350,000 for a production system (L1). Materials are obtained through Carbon’s resin store, which offers resins made by Carbon and a handful of third-party providers under a revenue-sharing agreement. Unlike competitors, this doesn’t mean a high price; the company has a track record of passing economies of scale onto customers and has cut prices every few months in the past. This puts material costs in the vicinity of US$20,000 per year per M2 and, assuming the same ratio, US$60,000 to US$100,000 per L1. Part of its recent funding will be used to develop new materials, such as biocompatible and recyclable resins.

In terms of technology, Digital Light Synthesis (DLS) works by projecting a sequence of Ultraviolet (UV) images from a custom, high-performance Light-Emitting Diode (LED) light engine onto a UV-curable resin (think of it as a derivative of vat photopolymerization, as outlined in the ABI Research report Additive Manufacturing in Industrial Applications). This allows the company to produce parts much faster and at a better quality than the rival AM Polymers providers.

Carbon and its peers target industries such as dental because it has the lowest barriers in terms of regulatory approval. Eventually, AM will move into other areas like advanced drug delivery and commercial aviation, but for now, it’s about the time to market and, importantly, time to value.

Carbon produced the midsole for 5,000 pairs of shoes for Adidas in 2017 and 100,000 pairs in 2018. It used to take 90 minutes per pair to print; now, it takes 30 minutes per pair. But Adidas doesn’t have just one printer; it has many, and it plans to produce volumes of inventory in the millions moving forward. For a sense of scale: Approximately 50–60 printers are responsible for each million midsole pairs of output per year. This means that if Adidas wants to produce 5 million pair of shoes per year using this method, it would theoretically need about 300 L1s—which is conservative in the long run considering that Adidas Group produced about 409 million pairs of shoes in 2018 (5 million is 1.2% of 409 million). While the platform and materials would ring in at US$105 million—(300 printers × US$250,000 per printer [assuming volume discount]) + (300 printers × US$100,000 materials cost per printer)—the value is there: 5 million pairs of shoes × US$100 per pair = US$500 million (oversimplified to exemplify the model). The real question is about transferability.

Carbon is among the most software-oriented companies in its space, and it’s largely a by-product of its business model. Think about what is needed to stand up such a system. Not only does it need a way to keep tabs on remote assets (both individually and collectively), but it also needs to address the intricacies of application enablement (e.g., edge/cloud and Information Technology [IT]/Operational Technology [OT] orchestration). For these reasons, it makes some sense that the company refers to its offering as a digital manufacturing platform, but there is some serious contention. For example, Fictiv, 3D Hubs, and Protolabs would all have something to say about digital manufacturing, as would Siemens, ABB, Autodesk, PTC, and GE. Carbon can get away from this by focusing on the advantages of its technology until it is in a better position to amplify the capabilities of its software stack. While this doesn’t mean showing the market what’s under its hood, it does entail a well-defined partner strategy with clear technology/use case alignment—two specific areas where Carbon can and should improve.