It has been two years since Markforged began to push its Digital Forge platform to the manufacturing public. A cloud-based network that would bring together its software, materials and hardware capabilities, Digital Forge was described by Markforged founder Greg Mark as a platform that would enable manufacturers to fabricate metal and composite parts ‘orders of magnitude cheaper than they’ve traditionally been made – on demand and at the point of need.’
Since then, there has been much change. Mark has departed, for one, and the company also went public. But as Markforged’s VP of Marketing Michael Papish told TCT this week, “the strategy has been the same from the founding of the company.” And to that end, Markforged has taken some big strides in 2022. First with the takeover of Teton Simulation, and now with the impending acquisition of Digital Metal from Höganäs AB.
In isolation, the purchases of a metal 3D printing technology that can give the company access to ‘higher throughput production of metal parts’ and a software technology that is a ‘usable, approachable FEA simulation software for FFF (Fused Filament Fabrication) 3D printing with the best results’ were no brainer moves. But together, they fill pieces of the jigsaw that conveys Markforged’s overarching ambition.
What attracted Markforged to Digital Metal?
Markforged sees Digital Metal's binder jet technology as complementing its ‘Swiss Army Knife’ Metal X - which caters for lower volumes of complex parts - by addressing applications in luxury goods, automotive and healthcare that are manufactured in volumes of thousands to tens of thousands. It represents a significant expansion of Markforged’s metal capabilities, from a worktop metal extrusion system to larger format binder jetting technology. And though throughout its nine-year existence Markforged has been a supplier of composite and metal extrusion technologies, it never wanted to be pigeonholed.
“We’re open to all different kinds of technologies,” Papish said, shortly after the Digital Metal announcement earlier this week. “Markforged is not an FFF company, we are a company that wants to help manufacture, and so we will use any technology that we think looks applicable and can help solve problems.”
How much is the deal to acquire Digital Metal worth?
Because of how the mixed offering deal has been thrashed out with parent company Höganäs AB, we won’t know the exact amount until the deal is closed. The 32 million USD + an additional 1.5 million USD portions of the transaction are fixed, but the value of the 4.1 million shares of Markforged common stock picked up by Höganäs AB can only be determined when the deal closes in Q3 2022*. On the day of the announcement, however, those 4.1m shares totalled just under 8 million USD. So, if there is little change to the value of Markforged shares when the acquisition is completed, the Boston-based company will have acquired Digital Metal in a deal worth over 40 million USD.
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For how long has Markforged been planning a move into binder jet technology?
Markforged is said to have been following movements in the binder jetting sector carefully. Digital Metal, of course, was one of the first brands to bring a binder jet solution to market, alongside pioneering company ExOne. In recent years, the likes of GE Additive and HP have announced they have their own metal binder jet technologies in development, while Desktop Metal came to market in 2017 – and acquired ExOne last year.
At Markforged, the company recognises binder jet is still in an early phase, but also acknowledges the potential it has to enable additive manufacturing at higher volumes. As such, it was deemed that binder jetting aligns with its aim of ‘pushing further into manufacturing operations.’
Papish said: “Really, it is our belief that [binder jetting] is a core component of additive manufacturing and when we find a group of people who really fit – the Digital Metal team have a strong focus on quality, on reliability, and they’re super experts in their field – that's what we love to work with. That’s exactly the DNA that we have.”
What does Markforged think it can add to Digital Metal’s binder jet offering?
How the integration of Digital Metal into Markforged will play out is still to be decided, but Papish says the company is excited to welcome the ‘really talented people who are experts in their field’ as well as the metal binder jet technology that Digital Metal offers. Digital Metal's binder jetting portfolio includes the DM P2500 platform and the recently introduced DMP/PRO system.
The company does, however, know exactly how its existing go-to-market offering can enhance the binder jet portfolio it has acquired. Its go-to-market network is global, with Markforged having a footprint in more than 70 countries whereby distributors sell technologies and provide support to customers.
“When you look at the history of additive, there are lots of interesting and promising technologies, but you have to marry the technology with a commercialisation engine and an ability to bring it to market and serve the customer to succeed,” Papish said. “Because we have that distribution channel, we have those feet on the ground, we are ready to scale this.”
What about software?
In software, Markforged has an increasingly extensive proficiency that encompasses its Eiger, Eiger Fleet and Blacksmith tools, while also leaning on a recently announced partnership with 3YOURMIND. The goal is to build a single platform that allows users to view operations from one dashboard, tap into a centralised digital part inventory, and allow users to scale their additive manufacturing infrastructure.
The latest Markforged software piece to be added to the Digital Forge came via the acquisition of Teton Simulation in April.
Why did Markforged acquire Teton Simulation?
This deal came about as Markforged and Teton Simulation commenced discussions on a partnership – the kind that Teton had already struck with Ultimaker, Stratasys and BigRep – but became something else entirely. Markforged was working to find a solution that could answer customers’ questions around the strength that Markforged’s 3D printing systems can build into their parts. Without printing the parts and testing them, Markforged didn’t have an exacting response to give.
With Teton’s SmartSlice technology, the company realised it would finally be able to offer guidance on how strong the parts were, how they needed to design for it, and how much carbon fibre the component required.
“What became clear is that the right home for [Teton Simulation] was us,” Markforged Director of Product Management for Software Ted Plummer told TCT in May, “because the problem they were solving was very Markforged specific. Customers are ultimately going to be able to use this technology to lower the cost of their parts because, today, you might just chuck a bunch of carbon fibre in there until it’s strong enough. Now, you’ll know how much you can engineer your parts and design them, lower the cost per part and increase your adoption again.”
What is SmartSlice?
SmartSlice is a simulation tool for the slicing step in a 3D printing workflow. It has been designed to quickly optimise and validate 3D print parameters, integrating with slicer programmes to replace typical print-break-reprint prototyping cycles. This helps to save time and cost in the development of products. Prior to being acquired by Markforged, the SmartSlice software was deployed by RE Suspension in combination with an Ultimaker 3D printer to implement modifier meshes that locally reinforced the part where extra walls and infill density were needed, saving the company weeks in time.
Can users of other 3D printing platforms like Ultimaker still use SmartSlice?
No. Though SmartSlice was brought to market via a plug in into Ultimaker’s Cura software, Markforged has taken the decision to cut ties with Teton’s partners, shut down the APIs that linked SmartSlice to third-party software platforms, and make the tools exclusive to Markforged - for now, at least. Reimbursements are said to have been made to existing users of SmartSlice, and 'generous offers' given to have them become Markforged users, with the buying company keen to have its influence on the technology before rolling it back out.
“The product that they had on the market before the acquisition was a plug in to a number of other providers, so that was a costly thing to maintain,” Plummer explained. “As we launch, we’re really big into focusing and delivering, so we want to nail the key platform and we want to have a seamless integrated experience.”
How is SmartSlice being integrated into Markforged?
SmartSlice is currently in the process of being integrated into Markforged’s other software offerings. At RAPID + TCT, Plummer told TCT that SmartSlice would be ‘deeply integrated’ into Markforged’s Eiger platform, such that users will be able to import their part, input their settings and then run a validation within the Eiger workflow.
“The new thing in Eiger is going to be, give us your part, where is it going to be anchored? Where's it going to be loaded? And then we can tell you pass/fail in 30 seconds to a couple of minutes,” Plummer explained. “Then, if you want to optimise your part in the cloud, automatically, we can say, ‘listen, you only need two rings of fibre instead of four rings of fibre, let's cut that part cost in half.’ So that's going to be all seamless in the design phase of Eiger, then when you're printing, we'll have Blacksmith running in process, and we'll do the verification, so did you design the right part and did you print the right part? You’ll have that full traceability.”
How important is software to Markforged’s vision?
Very. After recent developments, Markforged users will soon have access to tools in Eiger, Blacksmith, SmartSlice and 3YOURMIND’s MES offering.
Eiger is the engine of Markforged’s Digital Forge platform and allows users to slice parts, prep parts, send them to the printer and monitor the builds within the same workflow. Eiger Fleet is a module that gives manufacturers the ability to control a fleet of different printer with multiple people in multiple locations and is designed to facilitate additive manufacturing scale ups. Blacksmith is an AI-powered quality control tool that carries out real-time inspection to verify the printer is building, with precision, the part that has been designed. And finally, a partnership with 3YOURMIND provides users with an end-to-end automated solution that facilitates the creation and scheduling of prints directly from product lifecycle management solutions.
This all comes together to empower the hardware solutions that Markforged already offers – such as its Metal X and composite 3D printer portfolio – as well as the binder jetting technology set to be integrated when the Digital Metal takeover closes.
“We believe our software is, in the long run, probably the thing that is most unique about what we do here,” Papish said. “And we think it’s really going to be one of the pieces that helps supercharge this technology.
“When you think of production, we need automation, we need the ability for the system to continually operate and operate in a reliable way. The manufacturer needs to know the status of exactly what's going on at any moment and have a bunch of mechanisms to coordinate between the different technologies that they're using.”
*The Sale and Purchase Agreement between Markforged and Höganäs AB states: Assuming that no Leakage is notified pursuant to Clause 3.5, USD thirty two million (32,000,000) of the Purchase Price shall be paid by the Buyer to the Seller in cash at Closing in accordance with Clause 5.2(a)(i) (the “Cash Amount”), and by the Buyer issuing 4,100,000 Buyer Shares to the Seller (the “Consideration Shares”) (for the avoidance of doubt, the Consideration Shares shall always be 4,100,000 Buyer Shares, regardless of the price of the Buyer Shares on the New York Stock Exchange at Closing (or Nasdaq if the shares are listed on Nasdaq at such time)).
