News Column

Austin 3D printing startup gets $1.5 million boost

May 28, 2014

By Claudia Grisales, Austin American-Statesman



May 28--An Austin-based 3D printing industry startup has gotten a major boost with $1.5 million in seed funding led largely by local investment firm MicroVentures.

Technology firm Structured Polymers, founded by several University of Texas graduates, was able to bypass traditional venture capital efforts by raising most of the cash -- $1.2 million -- in less than a week through MicroVentures' crowdfunding platform in their largest effort to date.

The money will help the Austin firm develop and sell "ink," or specialty polymer powders, used for commercial 3D printers, which can replicate an array of products, such as parts used in the aviation, automotive and medical industries.

"3D printing is not a fad, but the impetus for a new industrial revolution in the U.S.," MicroVentures President Bill Clark said in an announcement Wednesday. "There hasn't been real material innovation in this industry in more than 20 years. We think Structured Polymers is positioned to be a major winner in this market, as no matter who wins the battle for hardware market share, every 3D printer will need the kind of advanced ink this company is developing."

The move signals significant potential for the Austin startup, as 3D printing has quickly grown to a $2.6 billion industry in just the last few years, and there's plenty more growth to come as costs for printers are slated to decline, executives said. By 2019, the 3D printing industry is slated to reach $6.5 billion by 2019.

This year, key hardware patents are slated to expire that helped keep costs for commercial 3D printers astronomically high -- the printers can cost anywhere from $250,000 to $500,000, Clark said. Now, those printers could see price reductions of 30 to 50 percent after the patents expire, lowering costs and boosting demand for materials tied to the technological innovation.

The printers could give manufacturers key advantages, Clark said. For example, rather than having to store inventory, companies could theoretically have the 3D printers on hand to replicate products based on real-time demand.

Structured Polymers, which was launched in 2012 through the Austin Technology Incubator, has developed a new, proprietary manufacturing method, which is patented, using so-called Selective Laser Sintering, or SLS, that increases the types of materials, or polymers, the 3D printers can use. The firm's team is comprised of five team members, including founder and CEO Vikram Devarajan and Carl Deckard, inventor of the SLS process.

The effort "will help revolutionize final-part manufacturing through better and stronger materials," the company said.

The firm says their 3D printer "ink" will offer more manufacturing applications at a lower cost.

MicroVentures, which merges crowdfunding with the venture capital industry, led a funding round that involved about 65 investors that helped the Austin-based startup reach the $1.2 million mark.

"It is very cool, this is our largest raise and it just happens to be an Austin company," Clark said.

A remaining $300,000 was raised through other efforts such as angel and institutional investors to help the firm reach the $1.5 million mark.

Structured Polymers said they chose to go with crowdfunding over traditional venture funding because it was a quicker route to raise money.

"We are at a major turning point in the 3D printing industry due to 20-year-old hardware patents expiring," said Vikram Devarajan, co-founder and CEO of Structured Polymers. "This presents new opportunities in the commercial 3D printing market in particular, and Structured Polymers is set to capitalize on these changes by offering more specialized materials at lower costs than the limited materials available now."

MicroVentures is one of the oldest equity crowdfunding paltforms in the country, and the company took the rare step of also holding a seat on the board for Structured Polymers. The firm operates "like an online venture capital investment bank," MicroVentures President Bill Clark said.

"This deal is the perfect example of our ability to combine the best aspects of both venture capital and equity crowdfunding," Clark went on to say. "We not only offer mentorship and market research to our startups, but also the ability to quickly raise money from a growing online network of accredited investors."

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(c)2014 Austin American-Statesman, Texas

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Source: Austin American-Statesman (TX)


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