BASF Discovers Its Third Dimension
With the acquisition of Sculpteo, BASF enters the on-demand 3D-printed parts manufacturing business.
“Together with Sculpteo, we are pursuing our goal of establishing additive manufacturing as a proven technology for industrial mass production” — Dr. Dietmar Bender, Managing Director, BASF 3D Printing Solutions
German specialty chemical and materials giant BASF announced, in November 2019, that it had acquired French cloud-based 3D printing platform, and long-time business partner, Sculpteo.
The process of additive manufacturing, more commonly known as 3D printing, is a manufacturing process that creates three-dimensional objects by incrementally adding material until the object is complete. Once relegated to niche applications in parts prototyping and materials testing, additive manufacturing has evolved into an industry in its own right, with the capability to upend traditional economic paradigms in a variety of manufacturing industries.
In an age of advancing technology, the additive manufacturing industry is rapidly changing and evolving. It is also growing fast, with some analysts predicting the global market for goods, services and software already nearing $10 billion a year and forecasting it will pass $40 billions within the decade.
Many companies in traditional sectors, such as materials suppliers like BASF, find themselves exploring a variety of strategic options, through investments and M&A. Is the best strategy to seek to dominate the chemistry slice of the value chain? Or is vertical integration of printing solutions and services the best way to secure a strong position in this forming industry?
Who is BASF?
BASF is the largest chemical producer in the world. Founded as Badische Anilin und Soda Fabrik in 1865 in Mannheim, Germany, the group has grown into a diversified chemicals, materials, nutrition, technology, and services conglomerate with sales of nearly €63 billion, 120,000 employees and operations in 90 countries.
In 2001, BASF created BASF New Business Gmbh, a wholly-owned subsidiary focused on research, development, and investment in new materials, technologies, and system solutions. BASF has been developing innovative materials for 3D printing for years, based on its substantial chemistry portfolio. BASF New Business’ additive manufacturing business unit and new home of Sculpteo’s team, BASF 3D Printing Solutions Gmbh, was spun off from BASF New Business in 2011.
In 2017, Forward AM, the final evolution of BASF 3D Printing Solutions, and the comprehensive additive manufacturing brand of BASF group, was established, with “the goal to lead the Additive Manufacturing industrialization.”
In 2018, BASF announced its new strategy, which emphatically embraced aggressive sustainability targets and committed the company to a path of CO2-neutral organic growth, aiming to achieve nearly 1/3 of global sales from products that make a substantial contribution to sustainability, by 2025. After a decade of intense M&A dealmaking, BASF determined that it’d better focus on growing its main businesses organically.
It did however commit to still actively manage its portfolio, “looking for selective M&A opportunities that may offer transformative potential for distinct growth businesses or segments.” In particular to “drive innovation or technological differentiation” and to “enable new and sustainable business models.” In 2018, BASF New Business acquired shares in Advanc3D Materials GmbH, Hamburg, Germany, and in Setup Performance SAS, based in Lyon, France, to continue expansion of its 3D portfolio.
Who is Sculpteo?
Founded in Paris in 2009 by Eric Carreel and Clément Moreau, Sculpteo offers online 3D printing services, using rapid prototyping and a manufacturing process that provides access to a number of materials and finishes, in addition to optimization tools and workflow software.
Sculpteo started off as direct-to-consumer, on-demand, online printing service and made its services available to international customers, including in the in US, shortly after launching. It later launched an iPhone app that allowed users to 3D-print from their phones and quickly established itself as a top-of-mind brand in the emerging online 3D printing space.
In the years following, Sculpteo inked a partnership with eBay to power eBay’s new Exact 3D store, integrated its service into Adobe Photoshop CC, introduced batch printing controls, created a dedicated B2B printing farm, partnered with the French national postal service and announced in 2015 that it would power Staples’ new online 3D printing service. Throughout, Sculpteo maintained its technical leadership by continuously adding new materials to its catalog and value added services to its online offering.
Printing over 1,000 parts per day, Sculpteo has rapidly built its production capacity and worked around the downside of slow printing turnarounds, housing more 3D printers than the average competitor and producing more parts at a faster rate, becoming an undisputed industry leader.
As a privately held startup, Sculpteo has raised over €10 million in venture capital funds, from investors Creadev and XAnge, between 2012 and 2015. In 2017, Sculpteo spun off its software platform and launched FabPilot, its stand-alone SaaS solution for professional and industrial 3D printing.
The Deal
The acquisition agreement between BASF New Business Gmbh and Sculpteo was signed on November 14, 2019, pending regulatory approval, for an undisclosed amount. BASF New Business plans to rollup Sculpteo under its BASF 3D Printing Solutions subsidiary.
“Our customers will benefit from an extended range of services.” — Dr. Dietmar Bender, Managing Director, BASF 3D Printing Solutions
In an official statement, Dr. Dietmar Bender, Managing Director of BASF 3D Printing Solutions said: “Through the acquisition of Sculpteo, we can provide customers and partners with even faster access to our innovative 3D printing solutions. In addition, our customers will benefit from an extended range of services. Together with Sculpteo, we are pursuing our goal of establishing additive manufacturing as a proven technology for industrial mass production.”
Why It Matters
According to research by SmarTech Analysis, the global additive manufacturing market is set to quadruple in size in the next decade.
Additive manufacturing technologies have reached a level of maturity and a spectrum of applications that warrant the creation of full-lifecycle solution offerings. Forward AM, BASF’s new additive manufacturing brand, aims to do just that.
BASF has been producing 3D printing consumables like resins, powders and filaments for quite some time. It has partnerships with printer makers and technology developers the likes of HP, Xunshi Technology, BigRep, Origin and Essentium. It has also made investments in additive manufacturing startups, like its $25 million investment in Belgian software company Materialise in 2018. In recent years, BASF has acquired smaller materials developers like Dutch filament maker Innofil3D, Setup Performance and Advanc3D.
With this acquisition, BASF enters squarely the parts manufacturing business, not just the materials business. Being BASF, at its core, a materials developer and supplier, the acquisition of Sculpteo, a third-party independent printer, may seem at odds with its materials manufacturing DNA.
Still, additive manufacturing is a rapidly growing and developing industry. It is possible that the cloud-based, on-demand 3D printing market will eventually consolidate under the control of two or three global suppliers — re-organizing along the winner-takes-most dynamic of typical cloud software markets. In this light, vertically-integrating materials supply, software and production services makes perfect strategic sense, if anything as an edge against such a scenario.
In addition, BASF has, in one move, gotten a lot closer to its products’ ultimate customers, short-circuiting its communication channel with the end users of its materials technology. This should help in developing better materials and solutions. BASF can also now use Sculpteo to more profitably serve its largest customers and convince them to increase or accelerate their investments in 3D technology.
If BASF vertical integration strategy proves successful, expect other large players in the value chain, possibly from the chemistry side or the printer manufacturing side, aiming their M&A sights at independent on-demand printing platforms competing with Sculpteo.
TL;DR
- On November 14th, 2019, BASF purchased 3D printing company Sculpteo.
- Based in France, Sculpteo is a leading on-demand 3D printing service offering a wide range of materials options and value-added services.
- BASF has made a series of investments in 3D printing materials companies and created, in 2017, a new business unit under the brand Forward AM.
- With Sculpteo, BASF enters the on-demand parts manufacturing business.
- The vertical integration play creates a powerful player that can offer end-to-end solutions from materials, to manufacturing, software and consulting to demanding B2B customers.
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