Back on June 19, Stratasys ended weeks of speculation and announced that it was acquiring MakerBot, merging the business and DIY/maker markets for 3D printing. We all could see this coming, right? The only question was when and how and who.
MakerBot was founded in 2009, and (according to Stratasys) has sold more than 22,000 3D printers; 11,000 in the last 9 months alone. MakerBot was smart, building up a vibrant community around its 3D printers that includes Thingiverse.com. You buy the printer and want to make something — but what? Head over to Thingverse, pick something from the 90,000 files available for download and give it a go. A new toy for your favorite tot? Got it. Jewelry? That too. Then figure out what to do next with help from your new best friends in the community.
MakerBot saw its base morphing into “prosumers” — designers and engineers who use 3D printing professionally as well as part of their hobbying. And that, really, is what I see as the point behind the combination: just as the blurring of lines between personal and professional technology creates huge upheaval in our expectations of IT in our work lives, so does the move to use rapid prototyping across a wide spectrum of applications. What’s cool for a hobbyist may be cool for a pro, but a pro is on deadline and needs to get a job done quickly and accurately, shifting the expectations of tools and support to a higher level. The $2,500 paid for a MakerBot Replicator becomes part in a revenue-generating process and the game changes.
This is a stock transaction; Stratasys will issue shares valued at around $403 million for the initial purchase. MakerBot’s owners will also qualify for up to $201 million in performance-based earn-outs (stock or cash) through the end of 2014. That is a mighty steep multiple for a company that Stratasys says had revenue of $11.5 million in all of 2012 and $15.7 million in just the first quarter of 2013. Even assuming that revenue continues to ramp as quickly for the rest of 2013, this comes out to more than a 5x revenue multiple. But they’re not buying revenue; it’s all about reach and perception.
It was inevitable that MakerBot would be acquired, if only to give it broader reach. I think this is a good combination for Stratasys (though I have to question the price tag); I’m not so sure about MakerBot’s current base.
Assuming the deal closes, Stratasys gets an attractively priced, hip desktop line and the credibility to speak to makers in their own language. Less clear is how MakerBot’s maker fans will feel about this; how many of the 500,000 Thingiverse visitors each months will see this as a sell-out? Does this affect their relationship with the company to the point that they won’t continue in Thingiverse? I don’t know, but I hope Stratasys keeps to its plan of leaving MakerBot as a subsidiary that “maintains its own identity, products and go-to-market strategy”. Bre Pettis, MakerBot founder and sometime “face” of the maker movement, will continue to lead MakerBot.
In case that’s not enough 3D printing news, Microsoft apparently brought a MakerBot printer onstage at its recent developer conference to show that Windows 8.1 will have “native support for 3-D printers”. According to Barron’s, “Microsoft says developers will be able to add 3-D printing capabilities to their apps, and printing an object will be a simple tap on a “charm,” a utility shortcut on the side of the Windows 8.1 screen”. I’m not exactly sure what that means, but it sounds like “Print to PDF” will shortly be joined by “Print to 3D”. Cool.
[Barron’s has some choice words about 3D printing from Foxconn‘s CEO Terry Gou. Worth a click over to their site.]