IPO Watch: Amaero raises $8m to build global partnerships in 3D metal printing
Link copied to
The ASX is about to get a new competitor in 3D additive manufacturing, with Melbourne-based Amaero set to join the boards by the end of next week.
The company has raised $8m in an oversubscribed round, via the issuance of 40 million shares priced at 20c. It follows an earlier $2m raise back in August.
Speaking with Stockhead, CEO Barrie Finnin said the time was right to seek funding from public markets to coincide with a pickup in sales, as major clients commercialised their projects.
“It’s a good time to list because companies we’ve been working with are now emerging out of that R&D phase to production,” he said.
“We’ve been through R&D projects with companies such as Boeing and Raytheon. But the thing with the aerospace and defence sectors is that it’s a long sales cycle.”
“Typically you work on an R&D project, and then it’s a five-year qualification process after that. What’s happening now is these companies are all really committing to their production programs. So that’s why you do it now.”
Finnin said the liquidity and depth of public markets could be an important swing factor in the additive manufacturing space, given the capital-intensive nature of the industry.
“We had one instance where Boeing came to us and said look we know you’re going to have access to capital (from an ASX listing) — can you grow with us on this program,” he said.
“A listed structure gives us flexibility, and the ability to respond quickly to the dynamic requirements within markets.”
Amaero comes to the additive manufacturing space from a tertiary research background, having been spun out of Monash University in 2013.
Prior to that, R&D was driven by a team of engineers who were “poached” from the University of Birmingham in the UK, where they’d already been working on additive manufacturing techniques “for 20 years before that”, Finnin said.
Finnin said the company’s ongoing relationship with Monash gave it a point of differentiation in the market, in terms of the in-house intellectual property that had been developed as well as access to human capital.
“We’re probably deeper technically than any other company in the landscape. So if we take on a contract with a large aerospace company for example, it gives us the opportunity to scale up the project by utilising the resources within the university,” he said.
In discussing the $8m capital raise, Finnin said Amaero would deploy the capital to complement its existing operations as global customers moved into production.
The company recently established a manufacturing hub in El Segundo, California to help drive its commercial partnership with Boeing. It also set up operations in Toulouse, France in 2016 as part of its partnership with French aerospace company Safran.
“We’re prepared to make those investments because the market is still in its infancy. It de-risks projects when you’re expanding into a market that’s growing so fast,” Finnin said.
Additional funds will also be spent on positioning the company in Amaero’s second key market — tooling.
Finnin said the opportunities for additive manufacturing in the $90 billion global tooling market made for a good mix in the business model, because it didn’t have the long lead times associated with aerospace and defence.
“Tooling doesn’t have that same set of qualification requirements,” he said.
“So we can make tools for plastic injection moulding or die casting, and the hedge we need to jump over to get into production is a lot lower.”
While additive manufacturing is still a relative nascent sector, Finnin said the recent growth rates for 3D printing of metal products — around 20 per cent annually — was unlikely to stop anytime soon.
“Companies are now actually applying the tech to production solutions now, it’s not just R&D,” he said.
At the same time, 3D tech advancements won’t turn existing manufacturing practices completely on their head.
“It’s not going to completely replace casting processes, but what it may do is result in faster tool manufacturing to complement those processes,” he said.
“There’s new designs that you can’t make any other way. For example, we built our Aerospike rocket engine in less than four months. That’s where it becomes a game changer — faster product development cycles and things you couldn’t make before.”