Some M&A activity afoot in the world of hardware design: GrabCAD, an online community that has been described as the ‘Github for mechanical engineers’, is getting acquired by 3D printing giant Stratasys, a source tells us. The companies plan to announce the deal a little later today [Update: confirmed]. We have heard that the deal is in the region of nine figures, and around $100 million. It is an all-cash deal, but the exact figure is not being confirmed by the companies.
The high price comes in part from the fact that there were several others approaching GrabCAD, from what we understand. Suitors included Autodesk, which is also strong in computer-aided design services, and Adobe, which has its own inroads into providing services, and social communities, for designers (among its acquisitions are Behance).
Apart from the offer price, Stratasys’ approach, which will integrate GrabCAD as a separate operational unit in the Stratasys Global Products and Technology Group, was the most compelling to GrabCAD. Hardi Meybaum, GrabCAD’s co-founder and CEO, staying on to lead GrabCAD operations after the deal closes this month.
This is the latest in a string of notable acquisitions by Stratasys: others include MakerBot last year for $403 million, and Solid Concepts (you know, the ones that made the world’s first 3D-printed metal gun) earlier this year for $295 million. While those two, plus Interfacial Solutions (also earlier this year) all furthered Stratsys’ manufacturing capabilities, what GrabCAD gives the company is a deeper play into community services that exist around it.
GrabCAD, which is based in Cambridge, MA, launched as part of the TechStars Boston cohort in 2011 (it was also a part of Seedcamp just prior to that — it was originally founded in Estonia and still has development offices there and in the UK). GrabCAD had raised around $13.6 million from investors that include Charles River Ventures, David Sacks, Matrix Partners and Atlas Venture.
What GrabCAD gives to Stratasys is twofold.
First, it gets a collaboration platform in the form of Workbench — which launched last year as a place for a CAD workgroup to access and develop local and cloud-based files.
And second, Stratasys gets a vertically-focused social networking community, in this case currently serving over 1.5 million mechanical engineers who connect with each other, exchange ideas, seek out partners in crime, and can access a library of over 500,000 CAD models.
“This is part of what got us excited about it. The value of what the GrabCAD network brought was so clear,” said David Skok, a general partner at investor Matrix, which was an investor in several of GrabCAD’s rounds. “So often the value [in social networks] is not, but what GrabCAD did early on was address the concept of engineer drawings. Drawing a model without a preexisting idea is very hard, so there is a very concrete value for participants.” And there was an added benefit, he says: every time someone uploaded something new, GrabCAD got another long-term search term into Google, “creating a viral effect to increase the community.”
There is a clear business interest for Stratasys in offering platforms to further promote the community behind the services it offers, it further ties in users to Stratasys’ ecosystem, the engineering equivalent of going from field to table, as it were.
This last point seems to be logic behind the deal for Stratasys. “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 was founded to bring the world’s engineers together and help them collaborate to bring better products to market faster,” said Hardi Meybaum, CEO of GrabCAD, in the official statement. “By joining forces with Stratasys, a global leader in 3D printing and additive manufacturing, we believe we can extend the reach of one of the most exciting and innovative design collaboration technologies available. With its broad and growing customer base and worldwide presence, Stratasys can provide more customers around the world with exciting new solutions to meet their design needs.”
Vertically-focused social networks is an area that some VCs and others have highlighted as an area of interest as we see more maturation in social media, and a desire less for catch-all, huge communities and more for targeted and focused experiences.
Stratasys, which went public in 2008, is currently valued at over $6 billion.
Updated throughout with more detail from official news announcement.
