Velo3D
The last two years have been full of turbulence for Velo3D.
There have been changes at C-suite level, strategic reviews and a delisting from the stock exchange. At the turn of the year, there was even a change of ownership.
But it hasn't dissuaded customers from buying machines, doubling down on the technology and using the newly launched Rapid Production Solutions offering.
Having address Velo3D's immediate capitalisation needs, Arrayed is seeking to usher in a new vision, one that puts customers first and seeks to develop several revenue streams.
At RAPID + TCT last month, we caught up with new CEO Arun Jeldi [AJ] and former interim CEO (now COO) Brad Kreger [BK] to discuss Arrayed Additive's acquisition of Velo, the impact the new ownership has had so far, and the short-term ambitions of the company moving forward.
TCT: So, first, since Arrayed Additive took ownership of Velo3D, what have those changes been?
AJ: There are multiple focuses. So, the way we do business starts with the operations side, the strategy side, the way we go to the market, [making sure] we're not dependent on currently one stream of revenue of selling machines. We tested last year to see how the different model works and the initial model in 2024 worked, and we pinned down what makes Velo Velo and how the technology is different. So, recreating our own demand in the market by showing the world how we print the parts as a solution provider, what that means is focusing from software and to hardware and the production of the parts.
There is a gap, in general, in the market between traditional manufacturing and additive. Additive, in general, has a high level of engineering skill needed. The adoption of technology becomes harder when you don't have enough skill set in the market. You invested millions of dollars and now you're not able to produce what you want. If you invest $4 million you want $40 million of return. That's how the companies work. But that didn't happen. That's the reason why there is this low demand, even though the technology is exceptional. So, what Velo is trying to do is to fill that gap, so we will provide that service to make sure that you are successful of what you want. This is, by the end of the day, a parts business. Every machine is there to print parts. So, what customers want is an end product.
So, Velo decided that we will be the solution provider. We'll go to the customer, make sure that they're successful. You buy the machine, or you lease from us; you put it on our floor or your floor. It should be an ecosystem that needs to be built. That's how we are moving.
TCT: Arrayed has gone from working with Velo to acquiring Velo – what were the considerations you were making when assessing the opportunities of bringing the two companies together?
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AJ: My vision for the company always is from traditional manufacturing, all from feedstock level, materials, so we have another company called Crown Magnesium, which we have done a DOD magnesium extraction. So, taking all these parts together, it's a strategy of vertical integration to parts production. And obviously additive is a tool that actually combines the most complex designs you can make, which is not possible in traditional manufacturing. So in this vision of vertical integration, Velo seems to be a good fit with a great technology and has its common customers. So, that made it very easy for our decision to move to acquire.
TCT: Brad, you've been at Velo prior to Arrayed's acquisition of the company. From your perspective, what influence has Arrayed had so far?
BK: There's a couple different layers. As Arun articulated, he and the Arrayed organisation have taken the kernel of what we had as a business concept and are really expanding that to what we see as the future. It's been both bringing in a lot of experience, a lot of network and channel within the industry, but I think more than anything, it's vision, and I think it's really taking our technology, looking at what we were starting to build with building this capability of producing parts internally, but really operationalising that into a much broader strategy. Having that vision of really being able to meet the customer, continuing with their needs, from either being able to produce parts for them all the way through to providing the system and providing them the ecosystem to be successful with that platform in the back end.
TCT: And of course, there has been plenty to do for Arrayed coming into the business, but despite the struggles of the last couple of years, the machine orders have still been coming in.
BK: Yeah, I think it's an absolute testament to the technology, the product and the demand for it in the marketplace. In the second half of 2024 when we were really struggling quite a bit as an organisation, it's customers that pulled us through, quite frankly. And we had customers that were coming to us on a routine basis, saying, 'Look, my business is dependent on this technology and I need Velo. I need Velo to survive and to exist.' And we saw continued investment and platform sales. We saw some of our customers even further expand how they were working with the company, going from buying systems to things like buying systems and paying us to operate those systems, keeping those in our facility. It was both the existing technology, and I think the other real value proposition that we saw resonate with customers, is this ability to go from prototype to production in a very accelerated fashion. That transition really has been key. Again, Arrayed and Arun have now looked at how we continue to build on that model and double down on creating that capability for our customers.
TCT: Arun, prior to the Velo acquisition, Arrayed has been exploring the use of magnesium in additive manufacturing. What opportunities do you see there?
AJ: Multiple applications, actually. So, magnesium is 40% lighter than aluminium, and applications are limited because of lack of skill. There are only very few foundries left in magnesium, which, right now, defence is struggling to get the parts. Now, the castings wait time is about two years, and we produce about 65,000 different parts. And all those casted parts can be your basic stock and there are multiple applications where, in aerospace and defence, they didn't even look because there's a lack of skill. But if you have a service provider and the service there is DARPA, DoD, Air Force, everyone are looking for this kind of product, because aerospace in general is light weighting. If you reduce the weight and create a compact structure that is in competition with aluminum, that is a game changer. So, the opportunities come to us every single day, and we studied the market viability of it, which can be bigger than so far in all these years if we create a complex structure in 3D printing.
TCT: You mentioned earlier that Arrayed and Velo have common customers - can you shed any light on potential product synergies between the two organisations?
AJ: Velo has created this skill set of people, it created a great product that is well known around the world, so take the skill set and apply it to different materials, right? So, instead of a niche product, now we are multiple layers of producing different kinds of materials, so we have solutions which other machine manufacturers doesn't have, and we are focused on metals. So, that's the future. That's how we look at the Arrayed and Velo combination, is using both skill sets at a different level and moving forward.
TCT: Notably, as well, you're exhibiting here at RAPID + TCT with the Velo branding.
AJ: I believe in the brand. Velo as a brand I like it. Arrayed is a burgeoning company, it's a startup company, but Velo can accommodate Arrayed Additive in different levels. So, I want to keep the bigger brand first, even though both are my companies. But I bought this company because I believe in Velo, and the technology is utmost sophisticated [compared with vendors from] other parts of the world, like even the Chinese and European companies. Velo stands in DOD level or Air Force level, or any other research level - they prefer this brand. So I kept the brand the way it is.
TCT: A few years ago, Velo expanded into Germany with a dedicated facility. Is international expansion still part of the plan moving forward?
AJ: So, international expansion is needed because we have customers, not just in US, space or defence level, we have allies around the world, and that's how most of our businesses work. So, Velo is no different. My vision for Velo is make sure that we are globally present, and this is a technology we want to use for the best of mankind, and this will change the way we do manufacturing, the way we design things. And that's why additive engineering is so important. Because when you grow globally, as you mentioned, to produce economics, it works actually. There are ally companies like India. I mean, there's no threat in that. And you see a lot of companies moving away from China to these strategically aligned countries. So, Velo will be doing the same, and it's going to expand rapidly, because we are getting a lot of demand from Australia, Japan, Southeast Asia and also in Middle East right now. We're exploring different areas where we want to do business, like oil and gas, semiconductor, not just aerospace and defence.
TCT: Finally, what are your short-term ambitions for Velo?
AJ: So, first of all, the stability of the company itself. In 2025, we'll focus very much on customers and stability and diversification of our revenue streams. We want to establish this model in 2025 and we are completely focused on that. We are doing three or four things in parallel to make sure the customer is happy. There are several components. So, in the first quarter, what we did is we went to all our customers and learned what are the problems they are facing. We made a strategic evaluation of that and the technology and R&D, and so we put that in front of our engineers. On the operations level, we are budgeting and cutting our costs to make it profitable by 2026, and also we started the RPS system, where we are putting the rapid production of parts at the larger scale, where customers have a lot of interest. Now we're bringing that market back to California, and we are creating a sample model where it thrives for the future of our business.
So, operationally, we want to be efficient and make sure that we create that ecosystem to replicate in different parts. We're not distracted by going in several directions, we want to pin down our ability to give a customer the best product. So, that's what we're focused on.
BK: Certainly stabilising the company, getting it strong, is key. But I think the other piece, as Arun outlined, is rebuilding that relationship with customers, strengthening that and then, this is the narrative of last year, moving from a technology provider to a solution provider. I think that mindset and that approach to the market is something that really defines our 2025/26 strategy.
