Like any startup, Pirate3D’s journey has not always been a smooth upward climb. The company, which makes affordable yet stylish 3D printers, received US$1.43 million through a crowdfunding campaign in June 2013 – a record for a Singapore company that still stands today. But it later faced delivery delays caused by manufacturing and design problems, leading to plenty of irate customers demanding refunds. The company returned money to just under 15 percent of backers at the time of writing.
The setbacks have not deterred investors from pouring more money into Pirate3D though. The startup told Tech in Asia that it has raised US$2 million in a seed round involving individual investors from Singapore and Germany. Also, a quarter of the money came from Low Capital Management, a Singapore-based family office. The startup had a pre-money valuation of over US$8 million, and it plans to raise another US$3 to US$5 million before the year ends.
The funds will go towards fulfilling existing orders and refund requests, expanding the R&D team, and increasing manufacturing capabilities. “[We want] to really ramp up production and get those sweet volume discounts. If we buy materials in bulk we save 25 to 30 percent off the printer bill of materials price, which is fantastic,” Pirate3D co-founder Brendan Goh tells Tech in Asia.
The new round, which arrived in the midst of the refund requests and shipment delays, does raise the question: did it need the money to survive through the challenges and meet its obligations? “Yes and no,” Goh says, adding that the company would face a “tight squeeze” if it did not fundraise due to staffing and other costs. But getting new investment does give the team the opportunity to focus on measures that will grow the company.
For example, it will sell its products in new markets in places like the Middle East and Africa, and reach out to more channels, like specialist retailers and distributors. “We realize that 3D printing doesn’t fare too well on plain big box retail,” says Goh, referring to large retail stores. In his opinion, the best way to sell 3D printers is not to have them sit on the shelf, but to station an Apple Genius type person to explain the technology to consumers, who’d buy it online later. “Retail becomes more of a showroom which is something most brick and mortar retailers are seeing with most products actually.”
Pirate3D will also move into new product lines, including a 3D printer larger than its consumer-focused Buccaneer model. It is designed for professionals like architects and designers. While the startup will still focus on consumers, Goh justifies the move by saying that they’ve found a need in the market for a model that’s “superbly quick and reliable and under $5,000.”
Compared to the Buccaneer, the new product will emphasize speed and printing size over precision, because architects and designs are typically more concerned about visualizing ideas than making sure their printouts fit the dimensions exactly.
With the hype over 3D printing, we easily forget that the industry still has a long way to go before reaching mass adoption. While analysts predict that total spending on 3D printing could grow to as much as US$13.4 billion by 2018, the bulk of it will come from industrial applications rather than consumer ones. Sales of consumer 3D printers could increase to 850,000 units by then, but that’s a tiny drop compared to the volume sales of many other consumer gadgets.
Assuming that the industry follows the path predicted by analysts, focusing on professional usage may be a good strategy for Pirate3D. Given how competitive the consumer 3D printing market has become, winning a small slice of a tiny pie probably isn’t what the startup should aspire towards.
Goh confirms that Pirate3D has shifted away from a pure-consumer focus at the beginning. “I wouldn’t say consumer printers won’t work but when you deal with a certain segment and you see some needs there, why leave money on the table?”