It started with a no.
Two years into an independent company’s journey, one of the industry leaders proposed a takeover that was at odds with the start-up’s idea of bringing its modular, software-driven 3D printing technology to market.
It was going to navigate the COVID-19 pandemic, in which it had successfully sold multiple 3D printing systems and deployed its own fleet to produce millions of nasopharyngeal swabs, and autonomously ship its machines globally with the support of venture capital funding.
Somewhere along the way, Origin had its head turned, came back to the table and this week announced Stratasys had acquired it in a deal worth up to $100m.
“What we learned through this process was that Stratasys has this really remarkable global go-to-market engine and infrastructure,” Origin CEO Chris Prucha told TCT. “It is unlike anything in the industry from any pure 3D printing player. Companies that are trying to clone it that are start-ups, they just fall short. As we looked at this infrastructure, we realised that Stratasys has some missing technologies and that’s where we fit.”
“For us, it’s all about providing more value to our customers and historically we’ve played in two technologies, FDM and PolyJet, and those technologies have allowed us to serve a certain number of customer applications,” Stratasys’ President of Americas Rich Garrity added. “But there’s a lot of applications that our customers are looking to us for, particularly on the manufacturing side, and FDM and PolyJet don’t answer the bell for those applications. As we want to grow deeper with our customers and add more value, we recognise we’ve got to expand the technology portfolio.”
Nasopharyngeal swabs printed on the Origin One platform.
Nasopharyngeal swabs printed on the Origin One platform.
At the opposite end of 2020, this is not where Origin expected to be. It had plans to raise a Series B financing to coincide with the shipping of Origin One, which was announced in Q4 of 2019. The pandemic hit just as Origin ‘was starting to scale’ and just as it had started discussions with investors. Its attention was then placed elsewhere as it joined efforts to manufacture testing swabs and other in-demand components relevant to the fight against COVID-19. In the production of the swabs, Origin made significant strides as it developed a medical 3D printing application, received clinical approval and made a series of connections through collaborations with other industry players. Among them, via a marketing and promotion partnership, was Stratasys.
While Origin got an early taste of what is to come from Stratasys’ go-to-market infrastructure, it had also returned to the Origin One ‘introduction process’, where it had begun to ‘wrap up shipment, make some improvements and carry out some sustaining work’, successfully shipping several units that reduced the need to generate investment.
“It meant we didn’t have to sell the company,” Prucha said. “And we didn’t have to raise a dilutive round of capital on bad terms. We could continue to grow and prove points and raise a new round of capital on good terms and look at the options.”
In doing so, it initially rejected Stratasys’ takeover proposal, wanting to remain an independent company as it ramped up its shipping of the Origin One. It turned down multiple other companies too, according to Prucha. But as it continued to produce the COVID-19 testing swabs in the millions and continued to strategise its go-to-market plans for the Origin One, it reopened negotiations with Stratasys.
“This was an opportunity to leverage what I believe is the industry’s leading global go-to-market service and be in a place where we can continue to focus on the technology actually more intensively than we do today. Grow the team, grow the product and everything that we’re doing and really utilise that infrastructure without stepping on anybody’s toes,” Prucha said. “We realised that the opportunity with Stratasys was incredible. We don’t want to be acquired into a company and refocus on something else or to be grafted onto another technology. We have this world-class technology team, IP portfolio, software-driven architecture and we complement everything that Stratasys would need.”
Read more on Origin:
- Stratasys to acquire 3D printing start-up Origin in $100 million deal
- Inside Origin One: innovation, collaboration and thermo polymerisation
- Origin, nTopology & Stress Engineering Services take 1st place in Advanced Manufacturing Olympics challenge
- Origin starts shipping Origin One 3D printer
As such, Prucha and the Origin team will remain in place, continuing to operate out of its San Francisco facility and looking to ‘infuse the Silicon Valley start-up culture within Stratasys over time.’ Subsequently, Garrity says the industry should expect Stratasys to ‘modernise and evolve its approach with a more ecosystem-type mentality’ as it ‘steals some of the magic’ from the Origin team.
Together, the aim is to return Stratasys to its leadership position within additive manufacturing. Integrating a technology designed to enable mass production like P3 is a key part of that. Both parties, they say, agree that ‘there has to be a different business model for production’ and Stratasys has given its commitment to Origin’s existing partners – the likes of BASF, DSM and Henkel – that the Origin model of openness and flexible adoption options will stay intact.
This, Prucha believes, will mean ‘everybody wins.’ Stratasys projects the acquisition of Origin will add around $200m in revenue over the next five years, while Prucha hinted Origin’s business model will evolve in ‘ways that are good for customers.’ Those customers waiting on the other side of Stratasys’ go-to-market engine are at the forefront of minds as the companies now move forward together in tandem. “We believe we will be able to capture a wide range of in-demand production applications on a global scale,” Stratasys CEO Yoav Zeif was quoted in the announcement. Already, there are several industries in their sights.
“In medical, we’ve got a very strong portfolio of customers from the largest OEMs down who we think are going to be quite excited and then, especially with some of the material developments that are going on, aerospace [too],” Garrity said. “We were the first people to put [3D printed] parts on planes back in the mid-90s so we’ve got a lot of familiarity with aerospace production and you see what the Origin team did, beating out the Stratasys team in the recent US Air Force challenge, they took the gold, we took silver, obviously there is some real value just starting in aerospace.”
“Stratasys’ focus going forward is on polymer being the leader and the only real production market in polymer [additive manufacturing] where there are many, many customers, is dental,” Prucha added. “Our technology is geared really well for dental. The advanced materials we’re able to print will unlock or are unlocking new dental applications, as well as lowering the cost of applications. That’s enabled by a $35 per kilogram exclusive BASF dental model material that we co-developed, so that’s a market that we are going to pursue aggressively.”
Other application opportunities include the printing of large and solid injection moulds with cross-sectional geometries in composite-filled materials that can replace metal and, through its partnership with ECCO, the footwear market. In exploring other markets, Origin will now lean on Stratasys’ extensive application engineering team. As applications are developed, Stratasys and Origin will also accelerate efforts to get the Origin One platform into the hands of industrial players across the globe. This is where the Stratasys go-to-market engine, that comprises more than 160 ‘cream of the crop’ resellers, over 100 field service engineers and a range of vertical market-specific teams that deal directly with some of the biggest manufacturing names, will come into play.
The combination of this infrastructure and the addition of Origin’s P3 technology to the Stratasys portfolio is considered an integral part of re-establishing leadership and growth within the company, ensuring that it is the first port of call for any company looking to leverage 3D printing.
“When customers think about 3D printing and where to go for 3D printing needs, we want them thinking Stratasys first,” Garrity summed up. “That means having a breadth of technologies that we can answer the call on the right technology for the right application, providing a full solution to the customer.”
“To do that requires a successful integration, to work closely together, to continue to develop the technology and do a global launch,” Prucha offered. “That’s going to be the launchpad for not just being a significant player in markets like dental, but the launch pad for these new markets. We have the technology and process and materials to address applications. Now we want to do it at scale.”
At 11.00 GMT (06.00 ET) on Wednesday, December 9th, after months of discussions, the merger between Stratasys and Origin was announced. Within ten minutes, one of Stratasys’ biggest automotive customers had messaged Garrity enquiring about the P3 technology.
For contacts, access and opportunities like this, it ended with a yes.
On Tuesday January 5th, 2020, Stratasys' acquisition of Origin was completed. The deal is worth an initial $60m, with a further $40m subject to performance-based earnouts over three years.
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