Additive Economics: Reshoring, Risk, & Revenue in Additive Manufacturing

July 18, 2025 | Reading time: 6 min

 

In another live episode from the Rapid + TCT Show in Detroit, the Additive Snack Podcast welcomed Danny Piper, Managing Partner at NewCap Partners and host of the highly recommended "Printing Money" podcast.

This insightful conversation explored the dynamic interface between finance and the additive manufacturing (AM) industry and the future outlook for AM growth from an investment banker's perspective.

 

New Cap Partners: A Niche Focus in a Global Industry

Danny Piper began by introducing New Cap Partners, a specialized investment banking firm, distinct from the Wall Street giants. The firm primarily focuses on mergers and acquisitions and selective capital raising.

For capital raising, NewCap Partners typically avoids chasing VCs, instead concentrating on connecting smaller emerging startups, particularly in 3D printing. This has often involved material-related or defense-related companies, with investors like Hexcel, Evonik, Solvay, and Boeing participating.

NewCap Partners carves its niche in the "emerging technology space as a whole," typically working with companies under $100 million in revenue. These are often post-Series A/B companies or founder-backed enterprises that have avoided significant dilution, with enterprise values usually ranging from $20 million to $200 million.

While they carry the same licenses as larger banks, their distribution model is different, lacking a broad base of individual stock brokerage investors for private placements.

This allows them to focus on being value-added advisors, running processes, and deeply understanding the intricacies of the companies they work with. For about three members of the firm, including Piper, the focus is almost exclusively on advanced manufacturing and materials, with approximately 80% of Piper's current work being in 3D printing and its adjacencies.

 

Navigating Financial Turbulences and Geopolitical Shifts

Addressing the current chaotic economic environment and the impact of tariffs, Piper acknowledged the significant disruption. He suggested that different players might have different goals with tariffs, but the overall effect is problematic for companies attempting to reshore or shift manufacturing out of China to other countries.

Despite the uncertainty, which makes long-term manufacturing investments difficult, Piper noted he is busier than he has been in two years, suggesting a market comeback. The fundamental drivers — rethinking supply chains post-COVID and geopolitical issues — are creating opportunities, though the path to investment is still unclear.

A crucial factor in this landscape is the rise of Chinese AM manufacturers. Piper believes that prolonged tariffs against China could inadvertently benefit established European players like EOS.

He also highlighted the reshoring efforts in Europe, spurred by defense budget increases, which are starting to revive the metal services sector there. Germany remains the "center of the universe for laser powder fusion."

However, the European AM ecosystem faces unique challenges, exemplified by Airbus, which directs its commercial AM work (e.g., for A320s made in China) to Chinese suppliers, while its defense and space AM development remains Europe-centric. This disjointed approach can hinder the concentration of AM adoption across Europe.

 

The AM Stock Market: A Depressed but Evolving Landscape

Regarding the AM stock market, Piper noted that the industry has faced a period of depressed valuations, with many publicly traded companies trading below their historical revenue multiples.

However, there are signs of financial health improving as these companies take steps to strengthen their balance sheets and refine their strategic directions. Despite these positive moves, the market's short-term focus can penalize companies making significant long-term investments in manufacturing capabilities, such as expanding facilities for reshoring efforts.

This highlights a broader challenge: the expectation for manufacturing companies to scale with the rapid pace of software companies, which often misaligns with the capital-intensive and time-consuming nature of building out manufacturing operations.

 

The Crucial Role of Defense and the Need for Long-Term Capital

With an Air Force background in space systems, Piper has a unique view of the Department of Defense's impact. The DoD has been a major early adopter (especially in space), a driver of the laser powder bed fusion services market (missiles, space systems, suppressors), and an investor through grants (like SBIRs) and the corporate venture arms of defense contractors.

A critical strategic shift Piper highlighted is the move from massive, expensive weapon systems to smaller, numerous, unmanned systems.

This makes manufacturing capability itself a weapon system: "If Europe and the United States don't start thinking about manufacturing systems as weapon systems, yeah, we're screwed."

The challenge is financing this shift. Public markets demand quick returns, and private equity, with its typical five-year holding period and focus on levered cash flows, is often hesitant to fund the long-term R&D needed to integrate new manufacturing technologies. Piper advocates for a different kind of capital, such as 20-year funds, to bridge this gap.

 

The Contract Manufacturer Landscape: Pioneers and New Models

Piper observed that the leading AM contract manufacturers all started around 2012-2014 and endured a long grind of process development and machine qualification, often on early EOS systems like the M400, to reach their current scale of 30+ machines. Their hard-earned expertise and operational efficiencies make it difficult for new entrants to compete.

A contrasting model is ADDMAN, owned by American Industrial Partners. ADDMAN was created as an R&D hub to explore AM for the parent company's portfolio (e.g., looking at large-format printers for tooling applications for a company like Ascent Aerospace), thus isolating R&D expenses from the portfolio companies' EBITDA. Having achieved critical mass servicing internal needs, ADDMAN is now expanding as an external service provider. Piper also sees Directed Energy Deposition, both wire and powder-based, as an emerging area currently in a similar phase to where laser powder bed fusion was in 2012-2015.

 

Crystal Ball: Bullish Outlook with Frothy Peaks

Looking ahead, Piper is "more bullish now than I have been in a long time."

He anticipates a cyclical market, similar to the 2013-2014 peak and subsequent crash, potentially leading to another peak around 2028-2029.

This new wave won't be about "a printer in every home" or solely solving supply chain issues, but rather the broader adoption of AM in actual manufacturing. Tools that reduce adoption friction, as those mentioned in our conversation with Arno Held, and the influence of AI will contribute, likely leading to another phase of hype.

Smart money is already re-entering the market (e.g., Fortissimo's Stratasys investment). While the underlying growth of AM will be steady, Piper expects VC interest and less sophisticated investors to follow.

Despite a potentially bumpy ride this year, the tailwinds from reshoring, technological advancements, and DoD needs point toward significant growth opportunities.

 

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