“Incodema3D represents exactly the type of advanced industrial platform we seek to build at AFM Capital.The Company has established itself as a trusted partner to leading customers by delivering highly engineered metal components at production scale. We look forward to working closely with Sean and the Incodema3D team to invest in capacity and large-format additive technologies, while expanding the Company’s manufacturing footprint to support long-term customer programs.”

Incodema3D was advised by Cantor Fitzgerald as financial advisor, while Courtney Wellar Esq. and the law firm Bond Schoeneck & King served as legal advisors. You may recall that Cantor Fitzgerald also facilitated the sale of Owens Industries to an AFM Capital portfolio company a few months ago. AFM was advised by DLA Piper, with JPMorgan Chase and Gladstone Capital Corporation providing debt financing.

Incodema3D is an excellent company. Whittaker, and Matthew Lewis, Kevin Engel, James Hockey, James Hockey and others have been attending Additive Manufacturing Strategies (AMS) over the years. And it was nice for everyone to get to know them as helpful members of our community. Aside from this we can see that the success came from a focus on excellence and aerospace and defense. 

When the whole industry was preaching high mix low volume, Incodema3D was targeting serial production, reliability, repeatability, and low scrap rates. By building a large collection of machines, the company has made significant investments. But, more than this, it has invested in its people, training, and execution. An early focus on defense, suppressors, and aerospace was the right one, also. Expertise in the most critical parts and the most efficient manufacturing of those parts is key to their success. The company is relentless.

Many people have small service bureaus, and escaping the initial economics of having one metal machine, for example, is brutal. It’s very difficult to make money. By getting significant investment early, Incodema3D was able to secure better process economics. The company has not only invested in machines but also in the most productive ones. It has also made a big bet on EOS and sustained a long relationship with them spanning 14 years. That is key to building up institutional learning and tribal knowledge on several platforms. It’s not quite like Ryanair running only 737’s, but similarly, there are economies of scale.

As a service bureau, it is easy to get distracted by the shiny parts that you are making. Lots of industries and lots of applications everywhere. Incoma3D invested in bringing almost the whole process chain in-house, but having excellent suppliers on top of this as well. This combination is powerful. Some services outsource a lot of valuable time-critical work, such as heat treatment, while others struggle to find good local partners in anodizing or similar operations. Choosing what to insource and what to ship out is not a simple affair. Incodema3D also made substantial investments in CNC and in understanding CNC, which, of course, is important. But it’s easy to say that now; a lot of people who ten years ago thought that 3D printing was magic and CNC was something dumb that everyone could do. The combination of Additive and CNC, when done well, is very powerful, especially for parts with high regulatory burdens or tight tolerances.

With so many potential clients, service bureaus often struggle with the cost of quality. You’re either making too many cheap parts in an expensive process, or you have a way too expensive process for a lot of the parts that you make. Understanding which system you are in and how you perceive is key to solving this problem. You could try running two quality levels in-house, which I’ve never really seen work. Or you could focus on a family of clients, applications, and parts that are optimal for one quality level. This is what Incodema3D did. At the same time, it was at a very early stage, focused on production, efficiency, and repeatability.

Incodema3D is efficient as well with good people, but not too much overhead, in 2024 the firm reportedly had 55 staff. That, coupled with a focus on metrology, precision, and efficiency, made the company a very well-oiled machine. But, the focus on defense, energy and aerospace meant that similar processes, similar materials and similar quality levels and practices really brought dividends here. Other people had machines, but Incodema3D turned the entire operation from design to production and post-processing into an efficient, well-oiled machine. Beyond the Additive hype, there are well-working, efficient businesses with long-term contracts and good economics.

This seems like a good outcome for Incodema3D. I, for one, would love to know if Core or American Industrial Partners also threw their rings in the hat for this one. It’s interesting that a less additive-focused investor won on the day. Incodema3D shows us that we were all in the Additive business, but not many of us have turned Additive into a business. We were doing the VC SPAC cargo cult while Incodema3D was pushing out parts with ever greater efficiency. A lot of hard work and thought went into Incodema3D, and this is a well-deserved exit for the team.

Images courtesy of Incodema3D