How Materialise’s Founding Couple 3D Printed A Billion-Dollar Fortune

For a moment this winter, Fried Vancraen and Hilde Ingelaere, the founding couple behind 3D-printing firm Materialise saw their wealth soar past $2.6 billion, by Forbes’ calculations, as the company’s stock topped $80-a-share. Easy come, easy go: As 3D printing stocks have fallen, the Leuven, Belgium-based company has seen its shares drop to a recent $41, making the couple’s 60% stake worth $1.3 billion.

Vancraen, who is 59, would rather think about the long game, for the company and the industry he helped to launch, rather than the value of his stock. “I’m not saying my family is not wealthy,” he says in a recent video call. “We see it more as a responsibility.”

Back in the late-1980s, Vancraen was working at the Research Institute of the Belgian Metalworking Industry when he saw the first 3D printer from industry pioneer 3D Systems. He was wowed, and at first tried to convince his boss to invest in the new technology. “It was a paradigm shift,” he recalls.

“It’s easy to say that somebody is visionary, but Fried is one of those guys.”

When that idea didn’t pan out he quit his job and teamed up with his wife Ingalaere, who is 58 and holds a master’s degree in bioengineering, to start the company in 1990. Their original concept was simply to be a service center for the new 3D printers. Unlike Hans Langer, who founded EOS outside of Munich around the same time by gaining the attention of BMW and other large customers, Vancraen believed his customers were more likely to be smaller companies interested in prototyping. “In Belgium, we don’t have the same industrial base as the Germans,” he says. “That was why we started more as a service company.”

In the early days, Vancraen finished parts for customers around the kitchen table. Today, Materialise is one of the largest standalone 3D printing companies in the world with revenue last year of just over $200 million (at current exchange rates). Vancraen, who plans to retire at 65, has been the company’s CEO since the beginning.

As Materialise began working with its customers, Vancraen discovered that the existing software was a nightmare for 3D printing. “When we got our printer, our issue was that we didn’t have customers who had data that could be printed on it, so we had to start with 2D drawings that we modeled ourselves, which was a pain,” he says. “It was even worse than that because at that moment we needed to sell a story. We said, ‘Give us your CAD data and we will print it for you,’ but if a customer gave us CAD data it was such lousy quality that it was harder than starting from a drawing, so we were forced from the very first days to find a solution to the software problems.”

Vancraen commercialized the software Materialise developed, and over time it became the company’s big advantage. Vancraen signed on customers that include GM, Ford and Baxter Healthcare.

“It’s easy to say that somebody is visionary, but Fried is one of those guys,” says Guy Sips, an analyst at Brussels-based KBC Securities, who has followed the company since its 2014 initial public offering. “He always has 10-20-30 investment banks knocking on his door, and he is still refusing them, one because he believes in the fundamentals of his company, and two because he really likes what he’s doing.”

Over the years, Materialise found a second major business in medical, with a push from Ingalaere, who is now the company’s executive vice president of medical. Today, that division works on products that range from custom hip implants to surgical guides to hearing aids. At first they simply tried to copy human anatomy, Vancraen says, but over time they realized they could improve on implants with custom sizing and design or make complex surgeries go more smoothly with 3D printed guides.

Earlier this year, for example, its tools were used in the world’s first successful double hand and face transplant. “That’s something we are very proud of,” Vancraen says. An even more complex use for 3D printing that Materialise is working on is a bioresorbable splint that can restore a baby’s collapsed air passageways. In development with the University of Michigan, it has been used in some 20 compassionate care cases.

Last year was a tough year for the 3D printing industry, however, as the pandemic hit key sectors like automotive and aerospace hard. While double-digit growth was typical before the pandemic, growth slowed to 7.5% last year, reaching a total of $12.8 billion, according to the latest report by industry analyst Wohlers Associates. Materialise’s revenue fell 13% last year, and it posted a net loss of $9 million, versus a nearly $2 million profit in 2019. 

Despite the pandemic, Materialise, which trades on Nasdaq under the ticker MTLS, saw its shares soar, peaking at $80 on February 9, up four-fold over the previous 12 months, pumping up the company’s market value to more than $4.2 billion. A big push, Sips explains, came from Cathie Wood’s Ark Investment Management, which bet heavily on 3D printing and now owns a total of 16% of the company and a far larger piece of its publicly available float. “Because of the low liquidity and because the founder still owns 60% of the company, it was a self-fulfilling prophecy,” Sips says. “Everything above $50-a-share has, in my opinion, nothing to do with the company and the fundamentals….That being said, I am very optimistic on 3D printing and I am very positive on Materialise.”

Vancraen, who has seen it all before in 30 years at the helm, figures on slow growth over time as the technology gains new customers and new capabilities. “We have seen this boom in the 90s, we have seen another boom in the wake of the previous economic crisis, and now we see it again,” he says. “It is going to happen, but not next year….3D printing is a slow revolution.”