NVBots Spinout Digital Alloys Raises $5M for Metal 3D Printer
There’s a new 3D printing company in town, but it’ll feel familiar to those who follow the Boston-area 3D printing sector.
New Valence Robotics, which goes by NVBots, has spun out the metal-making 3D printer technology it was developing into a new company called Digital Alloys. The new firm was formed in January, and today it announced it has raised a $5 million Series A funding round led by Khosla Ventures, along with some of the individual investors who had also backed NVBots, says Digital Alloys CEO Duncan McCallum.
If all goes as planned, the money should help Burlington, MA-based Digital Alloys finish developing its first product and begin selling it later this year, McCallum (pictured above) says.
McCallum, an entrepreneur and former investor, was hired last May to be the CEO of Boston-based NVBots. He took over for AJ Perez, who co-founded the company a few years ago while studying at MIT. After McCallum came on board, Perez became NVBots’ chairman and focused on business development and running the company’s research division, NVLabs.
NVBots’ flagship product is a 3D printer that makes plastic parts and is controlled by an automated system. That system includes Web-based software for collaborative design and remotely directing the printing process, and a robotic arm that automatically removes the printed part and sets it aside, so the next job can start immediately. Most 3D printers don’t have the ability to automatically remove printed parts, although NVBots wasn’t the first to develop such a feature. MakerBot, for example, introduced something similar in 2010, but apparently no longer sells that product.
Meanwhile, NVLabs has been developing a metal-making 3D printer for over a year. The initial plan was for NVBots to commercialize that technology, but the more that company executives thought about it, the less it made sense, McCallum and Perez say.
“We’ve found that it’s really hard to operate two different small businesses together unless there’s a ton of synergy,” McCallum says. “We weren’t seeing as much overlap as we thought.”
Some businesses might have uses for both metal and plastic 3D printers—a car manufacturer, for one, uses metal parts for things like the chassis and plastic for the interior. But those parts are made by different departments, meaning NVBots would have to sell to different decision makers in the same organization who “care about very different things,” Perez says.
In addition, the metal 3D printing business is earlier stage, “cash-hungry,” “riskier,” and potentially chasing a bigger market opportunity, McCallum says. Meanwhile, NVBots has ramped up sales of its plastic 3D printers to the point that it expects to turn a profit this year, Perez says. (More on that in a minute.)
The two businesses “need different things,” so it made more sense to spin out the metal 3D printing tech into Digital Alloys, McCallum says.
He will now run the spinout company, while Perez will resume the top role at NVBots. (His official title will be president though—he’s not reclaiming the CEO title, he says.)
NVBots has a minority stake in Digital Alloys and is its largest shareholder, Perez says. The two companies share some board members, and NVBots has given the spinout intellectual property and equipment worth a few million dollars, McCallum says.
McCallum remains mum on some details about Digital Alloys’ planned product, such as the size of the printer. But some of its core features will include the ability to print production-quality parts using virtually any type of metal, and incorporate multiple metals in the same part, the company says. The printer will also use ordinary wires as its base material, which McCallum says should cost significantly less than the powders that many existing metal 3D printers use.
“Powders are very expensive to make and very expensive to handle because they can be explosive,” McCallum says.
Other selling points for Digital Alloys include a faster production process than typical metal 3D printers, McCallum claims. Customers should see a “massive boost in productivity,” he adds.
Digital Alloys will, of course, have to prove that its printers work as well as advertised. And it won’t be easy competing with big firms like GE, which has been shelling out hundreds of millions of dollars to acquire metal 3D printing companies, and well-funded startups like Desktop Metal, another Burlington firm developing a metal 3D printer.
As for NVBots, the startup seems to be coming into its own. Perez wouldn’t share revenues, but he says the company is on track to be in the black this year. It has worked with about 100 customers, including businesses, such as Staples and Japan-based Daiwa Steel Tube, and schools and universities, such as MIT and Carnegie Mellon, he says. (NVBots has raised at least $5.3 million from investors, according to SEC filings.)
Perez proudly notes that NVBots manufactures its printers in America and exports them to Asian markets like Japan and China—for many physical products, it’s typically the other way around. NVBots has had success selling to Asian customers in part because its printers’ automated capabilities dramatically reduce labor costs, he says.
NVBots printers are also easy to use, Perez says, so they’re not confined to engineering labs. Other departments, like sales, are showing interest, and some companies are buying multiple machines.
“We’ve kind of seen this [get a] foot in the door, and then the door blows wide open,” Perez says.