Why we invested in AM Craft, the future of 3D printed parts for aviation
One of the characteristics I often see among outlier founders who are able to build ambitious businesses is the ability to learn the nitty-gritty details of an industry, to the point where they can operate almost as equals with experienced industry veterans. Didzis Dejus and Janis Jatnieks have this ability, demonstrated clearly as I listened to their conversations with customers at the Aircraft Interiors Expo in Hamburg recently. Just over six years ago, having spent the previous five years learning about additive manufacturing by building the largest 3D printing operation in the Baltic States, they turned their attention to one segment of this market, the aviation industry.
Aviation has long worked with additive manufacturing but it has disappointed in the extent of its adoption as a manufacturing technique in this massive industry. As they learned the ins and outs of Part 21 certification, various polymer material tensile properties and talked to potential customers about their supply chain challenges, it became clear that a major opportunity sat in front of them. Not just a business opportunity, but also an opportunity for societal impact, since their polymer 3D printed parts save weight versus the part replaced — this is the most critical driver of reducing aviation fuel consumption.
The result is AM Craft — the industry’s first provider of certified airworthy spare parts that leverages a distributed manufacturing model and is building an IP portfolio of parts. Last week I witnessed major airlines and maintenance and repair operations (MROs) lining up at the AM Craft booth to view their ground-breaking part samples and to find out more about how this startup can help fix their problems. The core problem is their inability to source a large number of low-volume spare parts for interior cabins and seats. Everything from seat armrests and overhead panels to various other parts of an aircraft cabin is subject to severe wear and tear during use and also requires changes as an airline adapts its seating layout. All these parts have to be sourced only from suppliers who have the authorization to produce parts under strict airworthiness and safety certification rules, and which are also designs that have been strictly certified. OEMs would rather sell whole new sets of seats and cabin interiors than mess about with dozens or hundreds of units of small parts, so they are slow or refuse to supply these parts. And while this might seem like a small problem, globally it is a business worth many billions of dollars.
3D printing is an ideal manufacturing technique to bridge this gap. Since unit costs of parts are the same regardless of volume, many parts can be cost-effectively supplied using this manufacturing technique. AM Craft’s project to supply Finnair with overhead panels is a great example of this. Further, AM Craft is able to scale this part supply model without the need to invest in printer capacity beyond its home base in Latvia. They launched their first network printer partnership with Paradigm3D in September 2023, enabling customers in the Middle East to source parts that are produced under AM Craft’s certification but printed in Dubai and delivered locally. Additional locations in other aircraft maintenance hubs, such as Singapore and Hamburg, are in process, with a goal of providing customers with one-stop global ordering combined with fast, local delivery.
Moreover, the AM Craft founders have identified a further barrier to the adoption of 3D printed parts in this industry — when a single airline or MRO is contemplating the replacement of a part, they alone incur the certification cost that makes a small order uneconomic. By scouting parts that are commonly required by airlines, investing in certification, and then identifying other potential customers for the same part, AM Craft is building an IP portfolio of designs that can be sold to many customers, spreading the certification cost across more orders and thus enlarging the market. The strong success of TransDigm and HEICO as suppliers of spare parts for older aircraft models shows the massive potential of the aviation spare part industry and the value of holding ownership of designs that have attractive per-unit margins.
This opportunity was the basis, almost a year ago, of Change Ventures investment thesis when we led AM Craft’s 600k Euro pre-seed round, joined by the BadIdeas.fund angel syndicate. We were excited to partner with co-founders Didzis and Janis, who we already knew for many years, as well as Scott Sevcik, an industry veteran from Stratasys and Dassault, who joined as late co-founder.
Today we are delighted that AM Craft announced their strategic partnership with Stratasys, the world’s leading supplier of industrial polymer additive manufacturing printers and materials. This partnership includes a strategic investment, a commercial collaboration agreement to jointly drive faster adoption of 3D printed parts by the aviation industry as well as an agreement for AM Craft to take over Stratasys operations in Singapore. I am delighted to be working with industry veteran Jeff Hemenway, SVP Global Industrial Sales, who has joined the AM Craft board. We look forward to more ambitious steps and fast growth from the AM Craft team as they take the industry by storm.
Andris K. Berzins
Partner
