Stratasys to acquire GrabCAD

The takeaway

Stratasys gains a community of designers and engineers ready to use its 3D printing services, at a reasonable price.

The details

Today 3D printing leader Stratasys announced plans to buy GrabCAD, the fast-growing cloud-based community and collaboration hub for mechanical engineers and designers. Stratasys said the deal is all cash and will close before the end of September, but did not release the price.

Arduino device prototypes uploaded by GrabCAD Community users, available as the basis for a new design by any other Community member. (Source: GrabCAD)

TechCrunch is reporting Stratasys will pay around $100 million for GrabCAD. Generally speaking, public companies do not have to disclose the price of acquisitions if the amount is less than 5% of annual revenue. Stratasys expects to hit $775 million in annual revenue this year, resulting in a generous rule-of-thumb analysis of $38 million as the top bid based on the SEC formula. There is unconfirmed speculation of a tug-of-war over the company that drove up the price, with suitors including Autodesk also making bids for the VC-funded company. We will no doubt know the price when Stratasys files its required documents with the SEC later this year.
Viewed from the social network angle, $100 million is a bit pricey: it works out to about $66 per member of the GrabCAD Community.

GrabCAD has built a global community of mechanical engineers and designers who contribute regularly to the free repository of 3D CAD models, models anyone can use to jumpstart the design process or use as-is. Today there are around 50,000 file downloads per day from this library. It is a vertical social network with considerable utility to the user.

The social network is no doubt attractive to Stratasys, perhaps even more so than the file management tool Workbench. “The addition of GrabCAD provides Stratasys with a leading cloud-based collaboration platform for engineering teams to manage, share and view CAD files,” said David Reis, Stratasys CEO, in a statement. “By increasing the collaboration and accessibility of 3D CAD files, we believe we can further accelerate the adoption of 3D printing solutions and Stratasys’ product offerings. Together with GrabCAD, we believe that we will accelerate innovation and provide increased value to a growing universe of customers seeking to utilize 3D printing solutions. We also welcome GrabCAD’s active and important community to the Stratasys family. The potential within our 3D ecosystem is very exciting.”

GrabCAD started from humble origins. In 2009 two young Estonian mechanical engineers (Hardi Meybaum and Indrek Narusk) decided mechanical engineers needed a place online to share models of parts and assemblies. They started coding their ideas in PHP, and in a few weeks opened the free GrabCAD Community to the world. The site proved immediately popular, and growth accelerated as GrabCAD benefited from the network effect (the more users, the more valuable a network-based product becomes). In 2011 the founders moved headquarters to the Boston area, to be near its large nucleus of CAD developers and venture capital firms. In 2013 the company introduced Workbench. It gathered more than $15 million in venture capital funding in three rounds plus early angel investing.

It is the network effect that attracted Stratasys. In addition to manufacturing printers, Stratasys also operates 3D printing service bureaus. With the purchase of GrabCAD, they add 1.5 million new potential customers for their 3D printing services.

The GrabCAD Workbench browser dashboard. (Source: GrabCAD)

GrabCAD has made a point of being an open system, supporting all the major 3D mechanical CAD formats. The company has also proven to be aggressive about extending its capabilities by encouraging third-party developers to use its application programing interface (API). Software apps from several leading CAD vendors can be found in the GrabCAD Toolbox. Significant examples include:
• Autodesk Fusion 360 and AutoCAD 360 users can launch the program within GrabCAD to edit files;
• Keyshot users can “Import from GrabCAD” in Keyshot to create photorealistic renderings and scenes, which can then be published back into GrabCAD;
• Lagoa users can open models in GrabCAD for use in its cloud-based photorealistic renderer, which can then be saved to GrabCAD Workbench;
• SolidWorks users (2012 or later) can sync files directly from within SolidWorks to Workbench;
• Solid Edge and IronCAD can publish to Workbench from within the CAD environment;
• Creo users can view native models, drawings, and other proprietary Creo documents from within GrabCAD, and interact with assembly information, such as family table instances.

Stratasys says GrabCAD will continue to be located in Cambridge, Massachusetts and Estonia, and that current co-founder and CEO Meybaum will continue to lead the team.