Swedish metal 3D printer manufacturer Freemelt has raised €8.4 million ahead of its upcoming IPO on the Nasdaq First North Growth Market.
Set to be floated publicly for the first time on July 7 2021, 36.6 million of Freemelt’s shares will be made available for public purchase at a total value of SEK 1.83 million or €181,000. According to the firm’s CEO Ulric Ljungblad, the move represents an “important step” in the company’s progression as it will help fund the R&D of a production-ready 3D printer, and potentially draw the attention of further investors.
“The recently completed investment round now gives us the opportunity to develop a powerful and cost-effective 3D printing system for the manufacturing industry to broaden our offering in line with our long-term strategy,” said Ljungblad. “The listing of Freemelt on the Nasdaq First North Growth Market will [also] increase awareness of Freemelt and our products.”
Freemelt’s EBM technology
Set up in 2017 by a team of metal 3D printing specialists, Freemelt’s business model is based around its proprietary Electron Beam Melting (EBM) technology. At present, the company’s only product is its Freemelt ONE 3D printer, which is specifically designed to help qualify new metals for additive manufacturing applications.
Built with the aim of fostering a more collaborative, open-source and ultimately affordable approach to material development, Freemelt’s machine reportedly requires less powder than similar systems to operate. Thanks to these potential cost savings, the company believes that its 3D printer can help users experiment with a greater number of alloys, thus unlocking new EBM applications at a greater pace.
Since unveiling the Freemelt ONE, the company has raised $1.6 million in investment to fund the development of its technologies, culminating in the launch of ‘ProHeat.’ Announced back in September 2020, the firm’s new powder bed preheating method is set to be fitted to each of its upcoming systems, as a means of widening their material compatibility.
Despite the impact of the pandemic, the company’s technology has remained popular with research users, and the KTH Royal Institute of Technology recently ordered two machines. However, during the last year alone, the EBM space has become increasingly crowded, with Wayland Additive launching its inaugural Calibur 3 3D printer, and Sciaky revealing a new EBM throughput record.
Going public in Sweden
Having had its application for listing on the Swedish exchange approved by Nasdaq Stockholm AB, Freemelt will now trade under the ISIN code SE0011167170 and ticker ‘FREEM.’ Given that the company says its shareholders “don’t need to take any measures” on the listing, the firm has therefore cleared all the barriers needed to go ahead with its IPO.
To help facilitate Freemelt’s listing, Eminova Fondkommission has been appointed as its certified adviser, with Törngren Magnell & Partners Advokatfirma set to act as its legal adviser. In terms of ownership, the firm currently has around 5,000 shareholders, with the likes of Carlbergssjön and Palmstierna Invest holding some of the largest stakes.
As part of the company’s IPO, its board, senior executives and major shareholders have all committed to a lock up, in which they won’t sell any shares for twelve months after their first day of trading. As a result, 68% of Freemelt’s outstanding shares will not be made publicly available for at least a year following the firm’s listing on the Swedish Nasdaq.
Back in April 2021, the company also carried out a pre-IPO issue which saw it raise €8.4 million at a price of SEK 10 per share. This funding is set to be deployed in the R&D of a production system based on the Freemelt ONE’s EBM technology, while the firm believes that its IPO will now “create the conditions for growth” via increased interest from investors “both domestically and internationally.”
With regards to turnover, the company has provided a limited insight into its financials prior to its IPO, showing that it generated SEK 6.4 million in revenue during 2020, racking up a net loss of SEK 4.4 million in the process, and as of December 31 2020, it possessed assets worth an estimated total of SEK 33.7 million.
However, in a paper issued ahead of its listing, Freemelt also highlighted that it traditionally targets research customers, such as those operating at universities and institutes. While the firm aims to continue serving the needs of its R&D base, it says its new system will be more industry-focused, thus it “expects a strengthened interest from industrial players” moving forwards, potentially boosting its sales.
A waning SPAC IPO trend?
At the beginning of 2021, the 3D printing industry saw something of a boom in firms going public via SPAC mergers rather than traditional IPOs, but this has slowed down significantly in recent months. Manufacturing marketplace Xometry, for instance, went public on the Nasdaq Global Select Market earlier this month, in an IPO that could see it raise more than $250 million.
In March 2021, 3D printing service bureau 3D Metalforge also chose to go public via a conventional IPO on the Australian Securities Exchange (ASX). The move saw the company issue 50 million shares at $0.20 each, raising around A$10 million in capital, which has since helped fund an expansion of its facilities.
Elsewhere, Formlabs is resisting the temptation to cash in on the industry’s IPO trend altogether, with its CEO Max Lobovsky emphasizing that the firm is “taking its time” over going public. Lobovsky’s comments followed the conclusion of a Series E funding round which saw the company raise $150 million worth of investment.
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Featured image shows Freemelt’s ProHeat EBM preheating technology in progress. Image via Freemelt.