The world of 3D printing just got a whole lot smaller. Stratasys, an industry leader in professional-grade 3D printers, has acquired MakerBot, the leader in consumer-grade 3D printers. For about $ 430 million in a stock-for-stock transaction, MakerBot agreed to merge with a subsidiary of Stratasys and become a part of its family of products. This greatly extends the bottom end of the Stratasys price spectrum; the cheapest printer previously available from that company was the Mojo, which was much ballyhooed for its breaking of the $ 10,000 price point. By contrast, MakerBot’s blockbuster new Replicator 2 retails for a cool $ 2,200.
This is an astute move for the larger company. MakerBot has significant name recognition with the general public, something Stratasys lacks both by design (their marketing is corporate-focused) and the necessity of price. Not to mention that “Stratasys” sounds like a company that makes bunker-busters, or maybe weaponized anthrax. MakerBot’s friendly face, seen last September on the cover of Wired, gives it an in with consumers while its expertise with high-grade printing will almost certainly help move the affordable technology forward. From MakerBot’s perspective, continuing to improve the technology would be an increasingly expensive and time-consuming prospect, and it makes a lot of sense to hand that task over to Stratasys engineers.
Additionally, there is a growing awareness (or ought to be) of the descending ceiling in build quality needed by the average 3D printing user, even on the professional level; the bar for print quality in terms of resolution and material strength is constantly rising, but the requirements for the actual physical objects are not. Whether you’re prototyping a building for your design firm or creating a set of dice for your game of D&D, the MakerBot level of fidelity is coming closer and closer to what you actually need — and Stratasys knows it. There will always be demand at the super high-end of the printing industry, but as the technology advances, the number of super high-end users will shrink. Once the Replicator can print in higher-end materials, its fortunes are set to truly soar.
If its recent performance is any indication, it’s already in mid-upswing. According to internal reports, its earnings in Q1 2013 were almost $ 12 million, or roughly two-thirds of the income from all of 2012. Its forthcoming 3D scanner will put an array of 3D printing and prototyping technology in the hands of relatively average consumers — or, as MakerBot loves to call them, “prosumers.” If you want to extrude an object out of steel, or make a battery the size of a grain of sand, you’ll always need to look to the high end. Even most corporate clients, however, use their printers for tasks far less demanding than that, and it’s only a matter of time before penny-pinching executives figure out that they might not need the extreme high end to get the job done.
Tacked on to the end of the MakerBot announcement is another interesting acquisition for the $ 3.3 billion Stratasys giant: the digital design warehouse Thingiverse.com. If you’re looking to own the 3D printing universe, you want to own every facet of its economy, from the high end to the low end, from production to design. Barring a buyout of CAD itself, this is the smartest way for Stratasys to keep on top of the consumer market. Thingiverse is the largest database of digital designs, with everything from gears to video-game characters.
Stratasys is clearly keeping an eye on the future. 3D printing is likely not a bubble, but Stratasys’ historical segment of it might be. Companies making equipment for research corporations and academic departments, things like high-end spectrometers and analysis machines, have trouble raising the sort of profits Stratasys has posted in the past — its products are expensive, but it has few buyers and little room for growth. If high-end 3D printing is going in a similar direction, then these buyouts show ready Stratasys to adapt.