I had the opportunity to attend the Autodesk REAL 2016 event which is currently taking place at Fort Mason over March 8th and March 9th. This event focuses on “reality computing” – the ecosystem of reality capture, modeling tools, computational solutions and outputs (whether fully digital workflows or a process that results in a physical object).
The event kicked off with the first Autodesk REAL Deal pitch competition. Jesse Devitte from Borealis Ventures served as the emcee for this event. A VC in his own right (as the Managing Director and Co-founder of Borealis), Jesse understands the technical computing space and has a great track record of backing companies that impact the built environment. The VC panel judging the pitches consisted of: (1) Trae Vassalo, an independent investor/consultant who was previously a general partner of Kleiner Perkins Caufield & Byers; (2) Sven Strohband, CTO, Kholsa Ventures, and (3) Shahin Farshchi, a Partner with Lux Capital.
The winner of the competition will be announced, in conjunction with a VC panel discussion, at the end of the first day’s events starting at 5:00pm on the REAL Live Stage, Herbst Pavillion.
[Note: These were typed in near real time while watching the presenters and their interactions with the REAL Deal VC panelists – my apologies in advance if they don’t flow well, etc. I’ve tried to be as accurate as possible.]
Lucid VR was the first presenting company – pitching a 3D stereoscopic camera for the specific purpose of VR. Han Jin, the CEO and co-founder, presented on behalf of the company. He started by explaining that 16M headsets will be shipped this year or VR consumption – however – VR content creation is still incredibly difficult to produce. It is a “journey of pain” transiting time, money, huge data sets, production and sharing difficulties. Lucid VR has created an integrated hardware device, called the LucidCam, that “captures an experience” and simplifies the content production and publication process of VR content, which can then be consumed by all VR headsets. Han pitched the vision of combining multiple LucidCam devices to support immersive 360 VR, real time VR live streaming. Lucid VR hit its $100K crowdfunding campaign goal in November of 2015.
Sven’s initially asked a two-part question: (1) which market is the company trying to attack first – consumer or enterprise; and (2) what is the technical differentiation for the hardware device (multi camera setups have been around for a while). Han said that the initial use cases seem to be focusing on training applications – so more of an enterprise setup. He explained that while dual camera setups have been around, they are complex, multi-part mechanically driven solutions, where they leverage GPU based solutions to complete on device processing for real time for capture and playback – a more silicon versus mechanical based solution. Trae then asked about market timing – how will you get to market, what will be the pricing, etc. Han said that they planned to ship at the end of the year, and that as of right now they were primarily working with consumer retailers for content creation. They expected a GTM price point of between $300 and $400 for their capture device. Trae’s follow-up – even if you capture and create the content, isn’t one of the gating factors going to be that the consumers will not have the appropriate hardware/software locally to experience it?
The next presentation was from Minds Mechanical, and led by the CEO, Jacob Hockett.
Jacob explained that Minds Mechanical started as a solutions company – integrating various hardware and software to support the product development needs (primarily by providing inspection and compliance services) of some of the largest Tier 1 manufacturers in the world. While growing and developing this services business they realized that they had identified a generalized challenge – and were working to disrupt the metrology (as opposed to meteorology, as Jacob jokingly pointed out) space.
Jacob explained that current metrology software is very expensive and is often optimized and paired with specific hardware. Further compounding the problem is that various third party metrology software solutions often give different results on the same part, and even acting on the same data set. The expense in adding new seats, combined with potentially incompatible results across third party solutions, results in limited metrology information sharing within an organization.
They have developed a cloud-based solution called Quality to help solve these challenge – Jacob suggested that we think of as a PLM type solution for the manufacturing and inspection value chain; tying inspection data back into the design and build process. Jacob claims that Quality is the first truly cross platform solution available in the industry.
Given their existing customer relationships, they were targeting the aerospace, defense and MRO markets initially, to be followed by medical and automotive later. They are actively transitioning their business from a solutions business to a software company and were seeking a $700K investment to grow the team. [Note: Jacob was previously a product manager and AE at Verisurf Software, one of the market leading metrology software applications prior to starting Minds Mechanical.] The lack of modern, easy to use tools are barriers to the industry and Minds Mechanical is going to try and change the entire market.
Trae kicked off the questions – asking Jacob to identify who the buyer is within an organization and what is the driver for purchasing (expansion to new opportunities, cost savings, etc.). Jacob said that the buy decision was mostly a cost savings opportunity. Their pricing is low enough that it can be a credit card purchase, avoiding internal PO and purchase approval processes entirely. Trae then followed up by asking how the data was originally captured – Jacob explained that they abstract data from various third party metrology applications which might be used in an account and provide a publication and analytics layer on top of those content creation tools. Sven then asked about data ownership/regulation compliance for a SaaS solution – was it a barrier to purchase? Jacob said that they understand the challenges of hosting/acting upon manufacturing data on the cloud; but that the reality was that for certain manufacturers and certain types of projects it just “wasn’t going to happen”. Trae then asked whether they were working on a local hosted solution for those types of requirements, and Jacob said yes they were. Shahin from Lux then asked who they were selling to – was it the OEM (and trying to force them to mandate it within the value chain or to the actual supply chain participants? Jacob said that they will target the suppliers first, and not try and force the OEMs initially to demand use within their supply chain, focusing initially on a bottom-up sales approach first.
The next presentation was from Hermant Bheda, the CEO and founder of AREVO Labs. AREVO’s mission was to leverage additive manufacturing technologies to produce light and strong composite parts to replace metal parts for production applications. Hermant explained that they have ten pending patent applications and to execute on this vision they need: (1) high performance materials for production, (2) 3D printing software for production parts; and (3) a scalable manufacturing platform.
AREVO has create a continuous carbon fiber composite material which is five times as strong as titanium – unlocked by their proprietary software to weave this material together in a “true” 3D space (rather than 2.5D which they claim the existing FDM based printers use). AREVO claims to have transport the industry from 2.5D to true 3D by optimizing the tool path/material deposition to generate the best parts – integrating a proprietary solution to estimate the post production part strength, then optimize the tool path to use lowest cost, lowest time, highest strength solution.
Their solution is based around a robotic arm based manufacturing cell – and could be used for small to large parts (up to 2 meters in size). Markets from medical for single use applications, aerospace/defense for lightweight structural solutions, on demand industrial spare parts as well as oil & gas applications. They have current customer engagements with Northrup, Airbus, Bombardier, J&J and Schlumberger.
[FWIW, you and see an earlier article on them at 3DPrint.com here, as well as a video of their process. MarkForged is obviously also in the market and utilizes continuous carbon fiber as part of an AM process. One of the slides in the AREVO Labs deck which was quickly clicked through was comparison of the two process, would be interesting to learn more about that differentiation indeed!]
Hermant explained that they were currently seeking a Series A raise of $8M.
Shahin kicked off the questions for the panel – asking whether customers were primarily interested in purchasing parts produced from the technology or whether they wanted to buy the technology so they could produce their own? Hermant said that the answer is both – some want parts produced for them, others want the tech, it depends on what their anticipated needs were over time. Sven asked Hermant how he thought the market would settle out over time between continuous fiber (as with their solution) versus chopped fiber. Hermant said that they view both technologies as complimentary to each other – but in the metals replacement market, continuous fiber is the solution for many higher value, higher materials properties use cases, but both will exist in the market.
The final presentation of the day during the REAL Deal Pitch competition came from UNYQ – they had previously presented at the REAL 2015 event. Eythor Bendor, the CEO, presented on behalf of UNYQ. UNYQ develops personalized prosthetic and orthotic devices leveraging additive manufacturing for production. In 2016 they will be introducing the UNYQ Scoliosis Brace, having licensed the technology from 3D Systems, who are also investors. According to Crunchbase data UNYQ has raised right around $2.5M across three funding rounds, and expect to be profitable sometime in 2017.
UNYQ has been working a platform for 3D printing manufacturing, personalization and data integration – resulting in devices that are not only personalized using AM for production, but can also integrate various sensors so that they become IoT nodes reporting back various streams of data (performance, how long it has been worn, etc.) which can be shared with clinicians. UNYQ uses a photogrammetry based app to capture shape data and then leverages Autodesk technology to compute and mesh a solution. The information is captured in clinics and the devices are primarily produced on FDM printers – going from photos to personalized products in less than four weeks. They generated roughly $500K in revenues in 2015 starting with their prosthetic covers and have a GTM plan for their scoliosis offering which would have them generate $1M in sales within the first year after launch in May 2016.
UNYQ is currently seeking a $4M Series Seed round.
Trae asked how UNYQ could accelerate this into market – given the market need, why wasn’t adoption happening faster? Eythor said that in 2014/15 they had really been focusing on platform and partnership development – it was only at the very end of 2015 that they started creating a direct sales team. Given that there are only roughly 2,000 clinics in the US it was a known market and they had a plan of attack. The limited number of clinics, plus the opportunity to reach consumers directly via social media and other d2c marketing efforts will only accelerate growth in 2016 and beyond. Trae followed up by asking – where is the resistance to adoption in the market (is it the middleman or something else that bogging things down). Eythor said that it is more a process resistance (it hasn’t been done this way before, and with manual labor) than it is with the clinics themselves. Sven then asked about data comparing the treatment efficacy and patient outcomes using the UNYQ devices versus the “traditional” methods of treatment. Eythor said that while the sample set was limited, one of their strategic advisors had compared their solutions to those traditionally produced and found that the UNYQ offering was as least as good as what is in the market today – but with an absolutely clear preference on the patient side. The final question came from Shahin at Lux who asked whether there was market conflict in that the clinics (which are the primary way UNYQ gets to market) has a somewhat vested interest in continuing to do things the old way (potentially higher revenues/margins, lots of crafters involved in that value chain, reluctance to change, etc.). Eythor explained that they were focusing only on the 10-20% of the market that are progressive and landing/winning them; and then over time pull the rest of the market forward.