MT Magazine March/April 2022

MARCH/APRIL 2022

FEATURE STORY

29

by software topped the growth rate, starting from a mere $3 million in 2016 to $125 million in 2021, while the other three have largely centered around the 28% CAGR. Despite software’s explosive growth, it was the smallest category in 2016 at $3.3 million and is now on par with applications and materials categories in 2021 at $128 million. Despite the materials, software, and applications categories collectively now making up 36% of investments ($437 million) in 2021, these areas are still underfunded relative to the core companies and are hindering the broader adoption of AM. Mergers and acquisitions (M&A) in additive manufacturing have grown in number from 2017 with 17 events to 29 in 2019, before dropping down to 2020’s respectable 25, despite disruptions. In the same way that investments were delayed due to widespread uncertainty, M&A events saw a record year in 2021 with 49 companies finding new ownership. The drivers here were not simply a result of delayed action in 2020; the pandemic pushed 3D printing back into the public spotlight and secondarily highlighted the larger, privately held 3D-printing companies as targets for listing publicly via special purpose acquisition companies (SPACs). Irrespective of the approach to go public, the result was an avalanche of new money available to traditional, big-name, 3D-printing groups like 3D Systems as well as newly public 3D-printing companies such as Desktop Metal, Markforged, Velo3D, and services companies Fathom and Shapeways. In comparison to the much larger robotics industry, additive manufacturing saw nearly double the M&A activity in 2021. This pace may bring some to claim AM has arrived, but only 2022 and 2023 will reveal how this excess capital and M&A activity trickles down and converts into technology adoption and sustainable growth. Industrial Software Industrial software is an amalgamation of business models, technologies, and applications that ideally connect manufacturing technologies together with the necessary management, control, and implementation resources. Whether it’s a part design workflow or a sensor-based predictive maintenance schedule, software is now instrumental in every aspect of delivering

At the part and product level, design workflows (CAD/CAE/CAM) are increasingly being offered as an integrated experience on the cloud. Looking one level up, manufacturing execution systems, product lifecycle management, and enterprise resource planning are now integrating in cloud environments with design workflows aiming for systemwide efficiency. Tying into this idealized multilevel system is the risk mitigation aided by collecting sensor data at the equipment and personnel level to predict maintenance concerns before they escalate. To compliment the system-level goals of industrial software within a company, some offerings, such as networkmanufacturing platforms (or “marketplaces”), are addressing market-level inefficiencies. Without the dozens of core companies in industrial software enabling efficiencies, the physical manufacturing world remains at a standstill. Despite the intermingling of industrial software with AM and robotics, more than $1.6 billion in venture capital has been invested since 2016 to enable the physical manufacturing ecosystem. Are we there yet? At least $8.2 billion in emerging technology investments in 2021 argue that we have arrived. Looking forward, however, this amount is now the new baseline for growth and will only accelerate manufacturing technology changes in the next five years. This article was written by Dayton Horvath and Stephen LaMarca; data collection and analysis was carried out by Nina Anderson with additional support from Dayton and Stephen. For questions or comments, please email dhorvath@AMTonline.org.

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