Xometry Raises $23M To Grow Marketplace

Slightly more than $120 million in investment fund flows marked the week that ended Feb. 10. That’s a slowdown from the weeks prior and over the past several days, and no deal was in the triple-digit range.

The FinTech space, this time around, carried almost all of the activity for the week. The biggest transaction came from the banking space, where a series of private investors invested $30 million in Old Dominion National Bank. That event was followed closely on an absolute dollar amount by a roughly $24 million investment in Nymbus, through a series of private investors as well, with another $20 million flowing into Shanghai Fengzhixing Auto Finance Information Services Co. Ltd. For the week the U.S. held sway with 58 percent of fund flows, and Asia (outside of China) followed, at 23 percent of investments.

Xometry Raises $23M To Grow Manufacturing Marketplace

Small to medium-sized manufacturers represent a more than $50 billion market in the U.S. manufacturing sector. But widespread fragmentation and a lack of standard pricing have historically been two major problems facing it.

Xometry, the leading on-demand manufacturing marketplace platform, was created to solve both problems, said Bill Cronin, SVP of marketing at Xometry. In a nutshell, Xometry’s platform overhauls the time-intensive and inefficient buying process for engineers and designers, connecting manufacturers to customers in key U.S. industries.

Founded in 2014, the Maryland-based company has grown rapidly over the past few years. Today, Xometry’s software connects a nationwide network of small and medium-sized manufacturers working with CNC machining, 3-D printing, urethane casting and sheet metal, said Cronin, to over 4,000 customers including GE, MIT Lincoln Laboratory and NASA.

Prior to starting up the manufacturing network, Cronin said, there was no standard system for pricing for jobs like these. Big companies looking to develop specialized parts — whether they be for the aerospace, industrial or medical industries — would send out requests to a few machine shops across the country.

“They would get prices that could range, say, from $2,000 to $8,000,” Cronin said, “because there was no standardization.”

Likewise, small manufacturing businesses across the country were largely left out of the process entirely.

“There are over 190,000 small manufacturing businesses in the U.S. that have fewer than 20 employees,” said Cronin. “That group generally works locally. A machine shop in Texas is rarely doing work for a customer in Maine.”

At its core, Xometry’s platform is a mix of an Amazon interface and an Uber-esque back end, Cronin said. Xometry’s customers upload job requests to the manufacturing platform, which then uses pricing algorithms and pricing history to determine the cost.

“We’re their retailer in that way,” Cronin said. “Then our algorithm chooses facilities capable of manufacturing a requested part. The first person who wants it takes it, and the work is delivered through the network to that partner.”

Cronin noted that a majority of Xometry’s manufacturing partners are too small to have active marketing organizations.

“They can be a small group,” Cronin said. “They’re spending their time making parts and valuing potential projects they could win or lose.”

There’s no cost for a manufacturer to sign up, and the benefit, Cronin said, is the opportunity to take the business that suits their needs.

“One of the key pieces for these small manufacturers is capacity,” he said. “The question is when they can fit it into their machines and what’s available.”

Facilities receive notifications about orders that fit their specific capabilities and can take on jobs if and when they want them.

One of the key parts for Xometry, Cronin said, is to ensure they bring in high-quality manufacturers that can deliver on their work.

“When we bring on a new partner, we look at what machines they have — then we ramp them on. They don’t come in on day one and take on a massive order from one of our key customers,” he said. “We find a way to monitor and check quality before you get released to higher-cost jobs.”

Xometry also allows customers to rate the quality of parts from one to five to monitor output.

The company recently raised $23 million in new funding from GE Ventures and existing investors, including Highland Capital Partners.

“GE has been a customer of ours for a number of years,” Cronin said, “and we’ve been doing more and more work for them. They’ve seen the quality of our work and the experience with our interface. GE is a terrific brand to be aligned with for us and our manufacturing partners.”

The latest round of funding will be used to grow Xometry’s software platform, Cronin said, and to invest in the team behind the scenes.

“We’re very focused on meeting more of our customers’ needs and on our team,” he said. “We’ve grown from about 35 people or so about a year ago to almost 80 now, and the majority of that growth has been on our software development team. That’s going to continue to be a key point of focus for us.”

Additionally, Cronin noted, with Xometry’s interface, the company has the opportunity going forward to onboard additional materials and manufacturing processes to meet the needs of their customers.