At this moment, it seems that Yoav Stern has outplayed everyone, starting with Stratasys.
Although last year he didn’t achieve his main goal — acquiring Stratasys — truth is it had slim chances of success from the start.
Yet, at the same time, he played a key role in disrupting what seemed to be a certain acquisition of Desktop Metal by Stratasys, only to acquire Desktop Metal himself a few months later at a much lower price. That move was as unexpected as it was brilliant (and painful for Stratasys’ guys).
Boston Celtics vs. Desktop Metal, or how to lose a tons of money on 3D printing
The embarrassing story of the recent Unicorn of Additive Manufacturing.
And now, another major surprise — the acquisition of the financially troubled Markforged for $115 million — a fraction of what the company was worth just two years ago. Once again, it’s a severe jab at Stratasys, for whom Markforged is a small but highly irritating competitor.
Yes, beyond the financial aspect, Yoav Stern is ruthlessly trolling Stratasys. And he is doing it in full view of the entire AM industry. And Stratasys, entangled in its own problems and preparing for a long legal battle with Bambu Lab, can hardly respond.
After Nano Dimension’s latest acquisition, rumors are circulating about who could be next. Could it be Velo3D, drifting toward bankruptcy? Or perhaps struggling Sinterit? Maybe one of the rising stars, Meltio or SPEE3D?
If Stratasys wanted to make a statement move and prove that it’s still a major player in the market, it would undoubtedly go for Velo3D — just to prove a point. But it doesn’t have the money for that…
And it’s not just the infamous $5 million valuation that Velo3D currently has on the stock market, but all the liabilities it carries, which amount to a much larger sum.
Or maybe Stratasys isn’t planning to buy anyone anymore — maybe it’s preparing for its own sale? After all, it recently announced a plan to buy back its shares from the market for about $50 million.
There are so many unknowns… and so many possible scenarios!
However, amidst all these considerations, a seemingly secondary issue has slipped under the radar. Something most observers have simply forgotten about, assuming it was a long-settled matter.
The mutual hatred between Markforged and Desktop Metal.
A feud expressed through many years of legal battles, which not only failed to lead to any groundbreaking events but also damaged both companies’ reputations, within the AM industry and in the eyes of customers.
Imagine this. Companies that for years — from the very beginning of one of them — have been locked in a vicious fight, are now under the wing of a single owner and, sooner or later, will have to start working together.
It’s worth noting that the executive authority of this new owner is Yoav Stern — a man who is very direct and ruthless in achieving his goals.
He is unlikely to tolerate insubordination. He will likely expect that the warring parties find a way to make peace.
The thing is, Ric Fulop isn’t just anyone either… He is not a man who will humbly bend the knee. He has achieved too much.
Ah, this could be a very intriguing show.
So maybe it’s worth remembering how it all started…?
The unclear origins of the feud
The thing is, it’s hard to say for sure, “who started it.”
Perhaps even the main authors of this story no longer know, having become entrenched in their own positions, which may or may not reflect the facts. Let’s begin with what we know for certain…
Markforged was founded in 2013 by Greg Mark, an engineer and entrepreneur who had previously run two other startups (Aeromotions and Genasun), and also worked for manufacturing companies.
Mark developed an innovative 3D printing technology for composites, based on the FDM method. His process involved embedding continuous fibers — carbon, glass, or Kevlar — into layers of thermoplastic material (nylon).
To understand the innovation behind this method, it’s important to grasp what the alternatives were. In FDM/FFF technology, composite filaments infused with carbon fiber typically contain powdered fiber rather than actual continuous strands. At best, these filaments contain chopped fibers much less than 1 mm long.
This type of “fiber” does improve the strength of printed parts, but not to the extent one might imagine.
In contrast, with Greg Mark’s technology, the fiber could be several centimeters long.
The first 3D printer using this technique was the Mark One, unveiled at SolidWorks World in 2014. It was the world’s first 3D printer capable of printing with carbon fiber, Kevlar, and glass fiber, which immediately caught the attention of the AM world.
In its early stages of development, Markforged sought funding and became acquainted with Ric Fulop, a venture capital investor with a rich background in the technology sector. Fulop was also an entrepreneur, having run several startups since the early ’90s. He served on the boards of numerous companies, including Disqus, the popular system for commenting on online media articles.
Fulop joined Markforged in 2013 as a board member and played a key role in securing its early funding. Naturally, he was also involved in production and product development decisions.
In 2014, Markforged launched the Mark One, and in 2016, they introduced the Mark Two — an upgraded version of the original, offering more advanced composite printing capabilities.
In the same year, Onyx One and Onyx Pro also entered the market, working with a newly developed material by Markforged called Onyx, a nylon reinforced with micro carbon fiber particles. The Onyx Pro was equipped with an additional print head capable of printing with glass fiber, enabling the production of even stronger parts.
The catch is that the Mark Two and both Onyx models were released after Fulop had already left Markforged.
Fulop left in September 2015, and by October, he had founded Desktop Metal, a company aiming to revolutionize metal 3D printing by offering faster and cheaper ways to create parts compared to what was available at the time.
Fulop secured substantial funding from major venture capital investors, including Google Ventures, which allowed Desktop Metal to quickly rise to prominence in the industry.
We’re talking about hundreds of millions of dollars.
By the time the media first started reporting on the company, Desktop Metal had already raised over $200 million.
And no one knew exactly what the company was working on — except that it would involve metal 3D printing.
But Fulop wasn’t just good at raising money — he also assembled an exceptional management team, including scientists and engineers from prestigious institutions like MIT.
Leading the team was Emanuel “Ely” Sachs, the legendary co-creator of 3D printing with gypsum powder and the inventor of the term “3D printing.”
All this bolstered Desktop Metal’s reputation as a player focused on technological innovation.
From the start, Desktop Metal was seen as the main competitor to Markforged, especially in the metal 3D printing sector (more on that in a moment). Both companies were focused on dominating the growing metal 3D printing market but were developing different technologies, leading to tensions and later legal disputes.
Ric Fulop was a central figure in both companies, which deepened the conflict between them. His departure from Markforged and the founding of a rival company contributed to later accusations of trade secret violations.
ADAM & BMD
In January 2017, during CES trade fair in Las Vegas, Markforged introduced the ADAM (Atomic Diffusion Additive Manufacturing) technology alongside the launch of their new Metal X printer.
ADAM was a process based on 3D printing metal parts using layers of fine metal particles that were bonded together and then sintered in a furnace.
ADAM utilized the concept of atomic diffusion, which resulted in strong and precise metal parts.
A key component of ADAM was the use of metal filament composed of metal powder combined with a polymer binder. The production process consisted of several stages:
3D Printing: The filament is printed layer by layer, creating a “green” part, which is a pre-sintered structure.
Binder Removal: The part undergoes a debinding process that removes the polymer binder, leaving only the metal structure.
Sintering: The part is sintered at high temperatures, causing atomic diffusion and the consolidation of metal particles to form a solid metal component.
ADAM aimed to reduce the cost of producing metal parts and simplify the process compared to more complex and expensive methods like selective laser sintering.
However, at the very same time Desktop Metal was working on practically the same manufacturing method…
Desktop Metal developed its own process called BMD (Bound Metal Deposition), which also relied on metal filament but took a slightly different approach to the binder removal and sintering process.
Desktop Metal launched their Studio System printers, which were in direct competition with Markforged’s Metal X.
The introduction of ADAM by Markforged and the development of the competing BMD technology by Desktop Metal sparked fierce competition between the companies, ultimately leading to numerous patent disputes.
And although the ADAM technology debuted earlier than Desktop Metal’s BMD, the question of who was truly first and who stole from whom had to be answered by the courts. And more than once…
The court battles
In March 2018, Desktop Metal filed a lawsuit against Markforged in the Federal Court of Massachusetts, accusing it of patent infringement related to the technology used in their 3D printers.
The lawsuit specifically concerned technology related to the metal dispersion process, which allegedly infringed on Desktop Metal’s patents.
Markforged denied all accusations and countersued, claiming that Desktop Metal had no grounds for such allegations. They argued that Markforged’s technology was developed independently and did not use any trade secrets from Desktop Metal.
The trial began in June 2018, attracting significant attention within the 3D printing industry. Desktop Metal outlined its patents in detail, including the technology for composite metal printing that was allegedly infringed.
The court had to decide whether Desktop Metal’s patents were crucial to Markforged’s technology or if there was no infringement.
After reviewing the case, the jury ruled in June 2018 that Markforged did not infringe on Desktop Metal’s patents. Markforged was cleared of all charges.
Desktop Metal did not win the case, but the court’s decision did not put an end to all disputes between the companies. Desktop Metal also accused Markforged of stealing trade secrets.
The company claimed that a former Desktop Metal employee, who had moved to Markforged, had taken confidential information and used it to develop competing technologies.
These allegations were also dismissed by the court.
In summary, it can be said that Markforged won the legal battle, being cleared of all charges. However, the legal disputes effectively damaged the reputation of both companies.
At the same time, the rivalry between the two companies remained fierce. Both Markforged and Desktop Metal continued to develop their technologies and expand their patent portfolios in an attempt to dominate the 3D metal printing market (which, as we know, never came to pass…).
The Aftermath
At the end of 2020, Desktop Metal went public by merging with a SPAC (Special Purpose Acquisition Company) called Trine Acquisition Corp. As a result of this process, Desktop Metal became a public company without the need for a traditional initial public offering (IPO). Following its stock market debut, the company was valued at around $2.5 billion.
The company’s first decision as a publicly traded entity was to acquire EnvisionTEC — one of the most renowned 3D printer manufacturers in the world and the inventor of the DLP method. Soon after, Desktop Metal began a series of acquisitions, including smaller companies like Aerosint and Aidro, as well as larger ones like ExOne, its key competitor in the field of the other metal 3D printing method it was developing — Binder Jetting.
All of this, of course, came at a cost of massive losses, which were huge compared to the slowly growing and completely inadequate revenues.
As for Markforged, the company went public in July 2021 through a merger with a SPAC called one (NYSE: AONE). This transaction, like with Desktop Metal, allowed Markforged to avoid a traditional IPO. After the merger, Markforged was valued at approximately $2.1 billion.
At the end of 2021, the company’s founder, Greg Mark, left the firm.
In the summer of 2022, Markforged also decided to enter the Binder Jetting technology field by acquiring Digital Metal. This way, both companies maintained a relatively close mirror image of each other’s operations and product portfolios.
Since Desktop Metal also began developing 3D printing with fiber-reinforced polymers…
But it all amounted to nothing.
Chasing each other, neither Desktop Metal nor Markforged managed to achieve profitability. Both were burning through cash until the point where there was a real threat that it might run out in just a matter of months.
That’s why Desktop Metal began looking for a larger partner. This is where the topic of Stratasys came up, and when that didn’t work out, the company sold itself for a pittance to Nano Dimension and Yoav Stern.
The same Stern who, just a few months earlier, publicly insulted them, calling them “cash burners.”
Markforged followed a similar path. They recently lost a patent dispute to Continuous Composites Inc., resulting in a total compensation of $25 million (with $18 million due by the end of this year).
This also pushed the company into the arms of Nano Dimension — most likely the only entity willing (and able) to acquire them.
How to reconcile the enemies
Now, two rivals must sit at the same table. I don’t know how Stern plans to organize this, but there will undoubtedly be some form of consolidation.
With two companies producing very similar products (in the metals sector), one of them will have to cut something to reduce costs. I suspect the victims will be Digital Metal (the smallest of the three Binder Jetting manufacturers, alongside ExOne and Desktop Metal) and Studio System (Markforged’s solutions are more complementary in this regard).
Will the teams of these competing companies work together? Will their management even want that?
In theory, “it’s just business.” But in practice, business always involves someone’s “big ego.”
We’ll see how Yoav Stern handles it. It will certainly be harder than buying one company or the other.