Arris Composites
Arris Composites founders Riley Reese, Erick Davidson, and Ethan Escowitz.
- Berkeley-based Arris Composites uses 3-D printing tech to build parts from carbon and glass fiber composites, which are in turn used by the aerospace, automative and consumer electronics industries.
- The company just raised $48.5 million in a Series B round led by Taiwania Capital with participation from firms including New Enterprise Associates and Valo Ventures.
- The company plans to use the funding to establish a new manufacturing facility in Taiwan to help its Asia-based consumer electronics manufacturing customers.
- While CEO Ethan Escowitz said the pandemic added drama to the fundraising process, it benefitted from a strong relationship with its existing investors - in fact, the lead investor for its Series A round, NEA, introduced him to Taiwania Capital.
- Nor has the outbreak derailed the company's plans to open its Taiwan facility later this year: "Taiwan actually handled the situation very effectively - we have not slowed down our plans there at all," Escowitz told Business Insider. "Candidly, it's less disruptive for us now than it would have been a year from now."
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Funding during a global pandemic can be tricky, Arris Composites CEO Ethan Escowitz admits. But he says the coronavirus outbreak hasn't fully affected the 3D-printing startup's plans for the future.
Arris Composites, which manufactures carbon and glass fiber composites into parts for a wide range of industries including aerospace and consumer electronics, raised $48.5 million in a Series B round led by Taiwania Capital, it announced Friday.
The company plans to ramp up its manufacturing facilities with the new funds, as demand for its technology has grown - especially in the consumer electronics industry, largely concentrated in Asia. A new facility in Taiwan is in the works that it plans to open later this year.
It also plans to grow its US manufacturing operations, although it hasn't yet picked a location for that.
"Really, what the challenge for the technology or the material [composites] has been is that the process was too expensive," Escowitz explained. "So we developed a novel way to make these very high performance composites at a lower cost and really use the materials in an optimal way that wasn't possible before."
The timing of the new round wasn't ideal for Arris Composites: the startup began raising money before the coronavirus outbreak began to pick up speed, but soon found itself fundraising alongside an outbreak that was forcing cities to go into quarantine, upending markets, and prompted most investors to grow more cautious.
"As you can imagine, watching all of this when you're doing a fundraising adds a little bit of extra drama," Arris Composites CEO Ethan Escowitz told Business Insider.
But he says, luckily, the company had existing relationships with its investors that made it easier for them to go through the process - in fact, its Series A lead investor, New Enterprise Associates, actually introduced them to Taiwania Capital and then participated in the round. Valo Ventures and Alumni Ventures Group were also participants.
"Because we did these kind of longer relationships, I think that's an important lesson in having a good outcome despite a bad economy," Escowitz said.
As for the plans for the Taiwan facility, those have yet to be derailed. Escowitz says the company plans to begin manufacturing there later this year.
"The nature of manufacturing is that supply chains require you to make parts in particular locations," Escowitz said, adding that the company's consumer electronics had a much faster production cycle than most industries, so proximity was all the more important. "That's is really why we're doing an international expansion for what's essentially a relatively young company."
A trade war with China last year only increased the attractiveness of the opportunity, Escowitz noted.
"Everything in those areas affect our customers and everything. Those policies that affect our customers also affects us," Escowitz explained. "As you can imagine, it creates all kinds of new dynamics."
And Taiwan has so far handled the coronavirus outbreak well enough to prevent the CEO from worrying.
"Taiwan actually handled the situation very effectively. We have not slowed down our plans there at all," Escowitz said. "The Bay Area is in a little bit of a wait-and-see stage... there are certain R&D things that are on hold. We need to get back into the building to get back on track in that case."
Although the outbreak has hurt all industries, things could be a lot worse, Escowitz said.
"Candidly, this is less disruptive for us now than it would have been a year from now.... if it was when we were in the process of building out a new factory here or we were manufacturing in Taiwan," Escowitz said.