R3 Printing

Manufacturing is about to get personal.

Analytics

Raised to Date: Raised: $1,007,504

Aggregate Commitments $

Platform

StartEngine

Start Date

03/23/2022

Close Date

07/11/2022

Min. Goal

$10,000

Max. Goal

$3,940,000

Min. Investment

$250

Security Type

Convertible Note

Funding Type

RegCF

Series

Seed

Valuation Cap

$35,000,000

Discount Rate

15%

Rolling Commitments $

Status

Active

Reporting Date

05/21/2022

Days Remaining

51

% of Min. Goal

10,075%

% of Max. Goal

26%

Likelihood of Max
unlikely
Avg. Daily Raise

$17,076

Momentum
warm.svg
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Location

Los Angeles, California

Industry

Industrial Services

Tech Sector

CommerceTech

Distribution Model

B2B

Margin

Medium

Capital Intensity

High

Business Type

Growth

R3 Printing, with a valuation of $35 million, is raising funds on StartEngine. The company is bringing a custom 3D printer, R3 Printer, to the market. R3 Printer is a high-performance 3D printer that will help manufacturers in customized 3D-printed products at affordable prices. It also prints faster, is bigger, and doesn’t jam. R3 Printing is backed by Ocean Accelerator and is a recipient of federal grant funding from the United States Air Force. Petra Wood and Paul Sieradzki founded R3 Printing in 2018. The current crowdfunding campaign has a minimum target of $10,000 and a maximum target of $3,940,000. The campaign proceeds will be used to expand the team, tap into new revenue streams, finalize key components, and push new patents for approval.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$0

$0

COGS

$0

$0

Tax

$0

$0

 

 

Net Income

$-332,240

$-172,172

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$753,657

$272,512

Accounts Receivable

$0

$0

Total Assets

$933,271

$305,317

Short-Term Debt

$7,922

$19,000

Long-Term Debt

$1,009,550

$50,000

Total Liabilities

$1,017,472

$69,000

Financials as of: 03/23/2022
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
R3 Printing 07/11/2022 StartEngine $35,000,000 $1,007,504 Convertible Note Active RegCF
R3 Printing 06/29/2021 StartEngine $8,000,000 $1,630,000 Convertible Note Funded RegCF
R3 Printing 09/30/2019 Republic $7,500,000 $435,000 SAFE Funded RegCF
R3 Printing 07/11/2018 Republic $5,000,000 $97,978 SAFE Funded RegCF
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Ratings KingsCrowd Startup Rating Methodology Article

Analyst Report Analyst Report Methodology Article

Synopsis

Additive manufacturing, more commonly known as 3D printing, is a revolutionary way to manufacture products. A 2019 analysis by Ernst & Young found that 65% of relevant businesses surveyed had tried 3D printing, a significant increase over the 24% reported in 2016. Additionally, 43% of businesses say that 3D printing is boosting their competitiveness by better meeting customer needs, thanks to the superior customization potential of 3D printing compared to traditional manufacturing. 

However, there are various barriers hindering the widespread adoption of 3D printing. The most notable is cost. The majority of businesses in Ernst &Young’s report said that the high cost of 3D printing materials inhibits their adoption of the new technology. Transitioning to 3D printing racks up charges for buying new machines, paying for ongoing software subscriptions, purchasing raw materials, and more. 

R3 Printing hopes to introduce a 3D printer tailored for manufacturers, one that is more stable and less expensive than other alternatives on the market. R3 has spent several years developing this disruptive 3D printer and has raised several successive rounds of crowdfunding to finance ongoing research and development. The company currently holds seven patents on its 3D printing technology.

R3 Printing’s current StartEngine raise has been rated a Neutral Deal by the KingsCrowd investment team. 

Price

R3 Printing is raising on a convertible note at a $35 million valuation. This price seems quite steep given the company’s lack of traction. Though R3 has been raising capital in successive rounds of crowdfunding since 2018, it still hasn’t brought a 3D printer to market. The company has successfully secured seven patents, with nine pending applications, but it’s difficult to say whether those patents are valuable enough to merit a $35 million valuation on their own. Without more traction, this $35 million valuation is too speculative for a pre-revenue company.

Market

Additive manufacturing (3D printing) is undoubtedly a growing market. The technology has been lauded as cutting-edge and game changing by a range of experts from Ernst & Young to the Department of Defense. The global market for 3D printing was valued at a decent $13.8 billion in 2021, and the industry is a long way from maturity. It is expected to expand rapidly at a compound annual growth rate of 20.8% over the next eight years.

Much of the 3D printing market’s potential lies in the technology’s application to a wide range of industry verticals. While many might view 3D printing as an at-home hobby for the tech obsessed, it actually has the potential to fundamentally transform healthcare, aerospace, defense, and many more critical industries. As 3D printing technology evolves to better serve the specific needs of these customer types, companies like R3 Printing have a huge landscape of potential buyers. As a result, this company’s market prospects are quite strong.  

Team

R3 Printing was co-founded by Paul Sieradzki and Petra Wood. Both are relatively young founders without a great deal of professional experience. Before becoming the CEO of R3, Sieradzki spent three years as an entry-level analyst in the finance industry (Morgan Stanley and Bridgewater Associates). Wood, R3’s COO, graduated from New York University and spent a few years in production and digital marketing before launching the company. Neither co-founder has particularly impressive business experience or a direct tie to the manufacturing and 3D printing industry. 

The R3 team isn’t much larger than Sieradzki and Wood. Three mechanical engineers appear to be full-time employees, but R3 is otherwise staffed by consultants and advisors in domains like industrial design, branding, and government grants. 

Overall, the R3 Printing team isn’t specifically qualified to run this business. While R3’s co-founders have successfully raised capital and secured a number of patents, there doesn’t seem to be strong go-to-market execution expertise on this team yet. The company’s execution thus far has been encouraging, but the true test will come when R3 finally takes a printer to market.

Differentiators

R3 Printing prides itself on building a product that is better suited for customer use than any other printer on the market. The company seems to have spent a great deal of time and energy studying the existing landscape of 3D printing options and researching what potential buyers want. These include high-speed printing, built-in temperature regulation systems, the ability to print with both metal and polymer on the same machine, and flexible cloud capabilities. 

Given all of these differentiators, R3’s forthcoming printer does seem to offer a clear advantage over alternatives on the market. The company has also successfully secured seven patents for its technology, with nine more patents pending. However, it’s still too soon to say whether these theoretical selling points will actually come to life in a working printer available for sale. Ultimately, the best test of R3 Printing’s differentiation will be the printer’s performance in the market once it is available for purchase.

Performance

R3 Printing has enjoyed a number of successes over the last several years. Raising capital has seemingly been easy for the company, with three successful rounds of crowdfunding over the last four years. More than 6,000 crowdfunding investors have backed R3 Printing so far. 

R3 has also been successful in securing patents. The company currently holds seven, with nine more patent applications pending. These patents cover specific components of R3’s forthcoming 3D printer technology, which R3 insists will secure a strong advantage over the competition. 

In addition, R3 has had some initial success in securing deals with potential future clients. R3 received grant funding via the federal government’s Small Business Innovation Research program, and it secured six memoranda of understanding from US Air Force bases to pilot 3D printing. While these steps haven’t generated revenue yet, they do signal potential for R3 to bring in income in the future. 

Beyond these metrics of success, R3 Printing is a relatively young company that hasn’t yet brought in any revenue or launched a product in the market. R3 burned more than $330,000 in expenses in 2020, and 2021 financials aren’t available yet (but expenses likely went up, given R3’s progress in hiring engineers and further research and development). While R3 is showing many of the signs of a successful hardware technology company, financial performance remains poor. 

Risks

R3 Printing is a fairly risky investment, given that the company is pre-revenue (despite four years and as many rounds of crowdfunding). Therefore, the biggest area of risk is financial. R3 is burning money on research and development and personnel costs without any way of bringing in income, which is an urgent issue. Prospective investors should also note other risk factors common to early-stage hardware technology startups, including the risk that R3’s product simply never pans out and the time it may take to bring a fully functioning printer to market. 

Updates Since Last Round

R3 Printing last raised a round of crowdfunding in mid-2021. That was its third round of crowdfunding, and this current round is the fourth. With all of this capital raised, existing and prospective investors alike might wonder why R3 hasn’t made more progress. The company still hasn’t brought a product to market or generated any revenue, and it doesn’t offer a clear indication of when that might change. Despite that, the company’s valuation has more than tripled from $8 million in 2021 to its current $35 million. 

Since its last funding round, R3 boasts that it has accomplished several key milestones. It received six patents, hired three mechanical engineers, and unlocked the ability to print in metal as well as polymer on its 3D printer prototype. In sum, R3 Printing seems to have made some progress since its last round, but key milestones like launching a product and generating revenue are still not in sight. Therefore, R3 Printing has been downgraded from a Top Deal to a Neutral Deal.

Bearish Outlook

R3 Printing has achieved several surface-level milestones of success but seems to lack substance in terms of actual business potential. Receiving patents, entering initial memoranda of understanding with government clients, and participating in Y Combinator Startup School are all good signs. However, those signals matter much less than actually developing a working product and introducing it to the market. R3 Printing has been around for four years and is embarking on its fourth crowdfunding campaign. At some point, existing investors will begin to wonder when their capital will result in an actual product launch. 

Launching a functioning product is particularly important given that the 3D printing industry continues to move forward without R3 Printing. As each year goes by, existing 3D printing options become more feature rich. R3’s competitive differentiators may become less attractive to buyers who have already invested in other 3D printing technology. Without more traction in bringing a product to market, prospective investors might be wary to invest at this steep price.

Bullish Outlook

3D printing is a rapidly growing industry with a great deal of potential to expand into large industry verticals. Aerospace is the most promising sector for 3D printing, and R3 Printing has already made progress in forging relationships in it. The company has signed memoranda of understanding with six US Air Force bases to pilot its printers, which aligns with the military’s strategy to invest in 3D printing in coming years. 

In addition, R3 Printing has developed a robust capital pipeline with more than 6,000 existing investors. The company also completed Y Combinator Startup School. While not as prestigious as being accepted into a traditional Y Combinator cohort, the startup school still offers execution skills and networking connections that could benefit R3’s future growth. If R3 can manage to bring its 3D printer to market, it could well succeed in convincing buyers to invest in its unique competitive advantages.

Executive Summary

R3 Printing is developing a state-of-the-art 3D printer meant for commercial use. The technology will offer manufacturers significant efficiencies over existing printers that are too slow and too expensive for scalable product development. The market is growing rapidly as 3D printing continues to draw attention from more industries. R3 has secured seven patents, with nine applications pending, and has made progress in becoming a defense industry vendor. 

On the other hand, R3 Printing has spent four years and three prior rounds of crowdfunding capital on developing a product that still hasn’t launched, with no timetable for a go-to-market plan. The team also appears to lack experience that might help push R3 to further heights. It’s risky for R3 to continue burning cash without a plan to generate income, and its lack of traction is particularly unattractive for investors at this overinflated $35 million valuation. Therefore, R3 Printing has been rated a Neutral Deal. 

For questions regarding the KingsCrowd analyst report or ratings for this company, please reach out to support@kingscrowd.com

Analysis written on April 14, 2022. 

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R3 Printing on StartEngine 2022
$
Platform: StartEngine
Security Type: Convertible Note
Valuation: $35,000,000
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