SciFi Talks #5: Story of a 3D printing startup in Finland

Video conversation is in Nepali language.

In this episode of SciFi Talks, we talk with Santosh Mehta, the CEO and co-founder of Mehta Heino Industries, a Finnish company that makes 3D printers. Mehta Heino’s mission is to make 3D printing more affordable and accessible to everyone. Santosh tells us about the company’s history and its commitment to innovation. He also talks about the company’s latest product, the MANU 3D Printer, which is a budget-friendly and user-friendly printer that is perfect for beginners and hobbyists.

❓: Let’s start with 3D printing. How do you define 3D printing?

👉 I only became familiar with 3D printing when I came to Finland for my studies. During my exploration, I learned that it’s not a new technology. Commercially available 3D printers have been around since 1985, but they were not easily accessible to everyone due to patents and their high cost. It was only around 2004 or 2005 when some of the key patents began to expire, and UK universities started researching open-source Reprap technologies. This marked the beginning of the 3D printing hype.

Regarding the technology itself, there are various approaches, such as SLA, SLM, SLS, and FDM. The fundamental principle is creating a physical object / product by depositing material layer by layer, which is quite different from traditional methods like casting, where, for example, a statue or kitchen utensils are made by melting aluminum, as is done in our home country, Nepal. In these newer 3D printing technologies, there are different methods. One involves melting plastic and adding it layer by layer as it solidifies, which is known as FDM or FFF. Another approach uses photoreactive resin or powder with a laser to solidify the desired part. approach uses photoreactive resin and a laser to solidify the desired part.

❓: How did an academically talented guy think about entrepreneurial journey?

👉 I was born in Sunsari, Nepal, where my father had established a rice processing factory back in the early 1990s. I believe it was the first puffed-rice processing factory in all of Nepal. Growing up, I had the opportunity to witness the growth of a business from its inception, which served as a source of inspiration for me.

When I came to Finland for my studies, I found employment at a school. It was during this time that I met a local friend named Petri, who introduced me to a fascinating technology. Petri also informed me that we could create our own 3D printer using open-source resources. In 2015, we successfully built our first 3D printer. An article in the local media featured our 3D printer, which helped us find our initial customer. It was at this point that I realized that if we dedicated more effort to this project, we could achieve greater success and scale it up. Consequently, I decided to leave my job and commit 100% of my efforts to this project, even though we didn’t have a concrete business model in place.

❓: When exactly did you realize the scalability of this business ?

👉 Our first customer was a headphone company with a highly unique design for their product. Initially, their plan was to design and manufacture the headphones using injection molding, which is still the predominant method for producing over 90% of plastic items today. However, due to the complexity of their design, they faced challenges in terms of cost and design compromises. That’s when we proposed the idea of using 3D printing.

In the morning, they sent us their design, and by the evening, we had manufactured the headphone parts using 3D printing technology. The final product impressed them, and we secured the contract. However, the key issue here was that while open source technology was suitable for a few designs, it posed challenges when it came to producing thousands of headphones. Industrial-grade 3D printers were expensive, and it was at this point that we recognized the problem and embarked on developing our own 3D printer.

❓: How did you manage the cost after shifting to own printer development ?

👉 I didn’t have much knowledge about grants, and despite applying for some, I faced rejection, possibly because I was on a student visa / Residence Permit, which may have been a barrier. During the early stages of our venture, we relied on our income, profits, and savings to bootstrap the business, with the primary objective being to keep it moving forward. After completing my studies, I became more actively involved in fundraising efforts.

❓: Did your first customer- the headphone company use your service for manufacturing its products or just for prototyping?

👉 Small startups often face challenges when trying to compete with large corporations. When it comes to manufacturing thousands of headphones, Chinese companies or contract manufacturing firms may not be willing to accept small orders, often requiring a minimum order quantity of 10,000 units or more. This can pose a significant hurdle for early-stage companies.

This is where 3D printing plays a crucial role. It allows startups to manufacture their products, bring them to market, gather feedback from customers, and make modifications as needed, all without the constraints of large minimum order quantities. It provides a flexible and cost-effective way for smaller companies to iterate on their designs and build their businesses.

❓: Why should your customers choose you?

👉 We also offer an affordable design-as-a-service, providing access to our extensive years of experience and our supply chain resources, which we have learned and developed during our own product development. This way, you won’t make mistakes that we have made in the past.

Additionally, if you require accurate and repeatable parts made from carbon fiber or flexible materials, our 3D printer can produce them easily and quickly, which can be challenging to obtain from other printers on the market. Moreover, our final product maintains consistency over a range of 10 to thousands of cycles, ensuring reliable and high-quality results.

❓: How big is the market of 3D printing?

👉3D printing has become a pivotal approach in manufacturing, and when you examine online data, it’s estimated to be a global market exceeding 100 billion USD. If you consider the companies involved in this field, many of them have annual revenues surpassing half a billion USD, and these revenues are consistently growing at a rate of 10–12% each year. The compound annual growth rate (CAGR) for the 3D printing industry is projected to be around 20%. This suggests that it has the potential to become a market worth more than 250 billion USD.

The primary driver of this market growth is accessibility. As technology becomes more accessible and user-friendly, it opens up opportunities for a wider range of industries and businesses. I believe that the integration of AI and machine learning will further enhance the accessibility and utility of 3D printing technology.

Currently, some companies may be hesitant to adopt 3D printing technology, but as awareness grows and as the technology becomes more integrated into various industries, I expect this hesitation to shift, and we’ll see more widespread adoption and innovation in this field.

❓: Market is crowded. How do you think we can compete?

👉 We segment the market into three main categories: Basic: This encompasses the consumer market, which tends to have less demanding requirements. Professional and Industrial: These are the B2B (business-to-business) segments. Our primary focus lies within the professional and industrial sectors. We believe that our strength lies in enhancing accuracy and repeatability, printing a wide range of materials, and ability to do small batches of manufacturing, prototyping with 3d printers are the features that are particularly valuable to businesses in these segments. While these features may not hold as much relevance for the consumer market, we’ve chosen to concentrate our efforts on adding value and catering to the needs of B2B clients.

❓: Do you only sell service?

👉 In the early days, our focus was indeed on serving the professional and industrial markets. However, during the COVID-19 pandemic, we successfully secured funding, which proved instrumental in our production efforts. We also managed to sell our products within Finland during this time.

Currently, we are in the process of raising another round of funding. If we succeed in securing this additional funding, we are considering expanding our reach to the broader European Union (EU) market. This expansion could mark a significant step forward in our growth and market presence.

❓: How difficult was it to approach investors? What kind of investors did you choose?

👉 While seeking angel investors initially, we faced multiple rejections, possibly due to my status as a student and concerns about the founder’s commitment. However, our fortunes changed when we found Butterfly VC near the place where we were located after my graduation. I thoroughly researched their investment approach, examined their portfolio companies, and felt a strong alignment between their vision and our business goals.

Eventually, we successfully secured funding from Butterfly VC at a valuation of 2 million euros. Coupled with grants and previous funding, we raised approximately 175K euros. With our growing traction, solid financials, and the validation of our business model, I am confident that securing another round of funding will be considerably easier for us moving forward.

❓: What do you think are the key tricks to approach VCs and to raise fund successfully?

👉 Absolutely, understanding your business, the problem you’re solving, and the market you’re entering are fundamental prerequisites. Additionally, grasping the scalability potential of your business is crucial. A robust and skilled team is indispensable, regardless of whether you have a tangible product yet. Always center your pitch around addressing customer problems and incorporating their feedback.

In my own pitch deck, I included these strategies, emphasizing my ability to take the company to a certain level and expressing the potential for further growth with the guidance and support from venture capitalists. Confidence in your vision and abilities is key — believing in yourself can make a significant difference in convincing investors to back your venture.

❓: What additional benefits did you get from VCs?

👉 In the early stages of doing business, there’s often a clear goal, but there can also be a lot of noise and challenges to navigate. However, once you secure funding from venture capitalists (VCs), many of these initial challenges can be mitigated. VCs bring a wealth of experience in both the business and investment realms, and their expertise can help you streamline your operations and make more informed decisions.

Furthermore, VCs often have extensive networks within your industry, which can open doors to valuable partnerships, customers, and collaborators. As your business grows, having VCs on board can also be instrumental in subsequent fundraising efforts. They not only provide financial support but can vouch for your business’s potential, making it easier to attract additional investment. So, partnering with VCs can play a crucial role in the growth and success of your startup.

❓: Do you make software like Fusion360, AutoCAD?

👉 No. We are developing slicing software for processing 3D models specifically for 3D printing. It’s akin to having a Photoshop-like tool for editing pictures even after they’ve been taken, but in the context of 3D printing. While there are commercially available and open-source solutions for this, they may not be user-friendly or tightly integrated with your technology. Therefore, we are creating our own software to provide a more seamless and effective solution that complements 3D printing technology. This approach can offer an enhanced user experience, making it easier for users to work with 3D models for 3D printing.

❓: What suggestions you want to give to the aspiring founders from countries like Nepal?

👉 I’m currently in a learning phase, and my entrepreneurial journey began during my second year of undergraduate studies. My first suggestion is to believe in yourself, do not give up. Identify the problem that you’re solving in depth. Previous work experience will be helpful in building your own startup, so I always recommended working at other companies to learn project management, customer projects, the documentation process, leadership, etc. Life is for learning. Keep fire and hungry within you. Do not just run after waves.

🙏Thank you for reading our conversation.
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