This is the second post in a two-part series that highlights IQT’s perspective on manufacturing and supply chains in America. The first post can be found here.

Global events—from countries’ responses to the Covid-19 pandemic to the challenges of supplying critical equipment to Ukraine’s defenders—are a constant reminder of the need to promote a reliable and robust manufacturing base in America. To address that need and to help offset China’s dominance in key manufacturing fields, the US must be able to produce everything from effective vaccines to key parts for drones faster, more efficiently, and in ways that can be rapidly scaled.

Advanced technologies for making components and entire products can help achieve these goals—and at IQT we have a front-row seat in tracking their development across the US thanks to our investments in innovative young businesses creating or using them. As noted in our previous post, our portfolio of startups has long had a significantly higher percentage of hardware-related deals in key areas of national security compared with the venture industry average—and that percentage has been growing faster than at other investment firms. We’re also investors in companies such as Anduril and Skydio that are building autonomous aerial systems and other capabilities in America that are essential for national security.

This blog provides a high-level overview of some of the key advanced manufacturing domains whose evolution IQT is tracking closely, starting with additive manufacturing. Although this technology has been around for some time, companies in the field continue to innovate and broaden the areas in which additive tech can be applied.

Our portfolio company Markforged, for instance, has unveiled the FX10, an industrial composite 3D printer that achieves print speeds that are nearly twice as fast—and handles print sizes that are up to twice as large—as those of previous generations of its printers, further enabling the replacement of metal parts with ones made of advanced composites. And ICON, another US additive manufacturing business we have invested in, has reimagined the home-building process using 3D printing robotics and advanced materials. Its technology can also create structures such as barracks that are essential for defense logistics, and it is even working on a system that could build landing pads, roadways, and other infrastructure on the Moon.

Stoke Space, another IQT portfolio company, is building 100%reusable rockets that provide affordable access to, through, and from space. Their novel reusable upper stage employs a heat shield that has many small channels for hydrogen to flow through to facilitate cooling on reentry. Iterating fast is essential during the development phase, so Stoke rapidly prototypes by using 3D printing to create heat shield panels and other complex parts that would otherwise have a very long manufacturing lead time.

Boosting manufacturing through biology and AI

3D printing isn’t suited to all areas of manufacturing yet, but its ability to enable production to take place whenever and wherever it’s needed means it has become a critical element in boosting supply chain resiliency. Looking ahead, biomanufacturing also has the potential to reinforce America’s manufacturing base by harnessing biological systems to produce materials and molecules for use in pharmaceuticals, agriculture, industrial applications, and other areas.

As part of our work in developing US capabilities in this strategic domain, which promises to transform many sectors of the economy, we’ve invested in a range of startups that are pioneering innovative biomanufacturing approaches. For instance, Prolific Machines is driving down the cost of cell-based manufacturing by engineering cells to respond to light instead of having to use expensive growth media. While cell-based protein foods lead the startup’s product pipeline, the same technology could also significantly reduce the cost of making therapeutic biologics—medicines derived from living organisms—and other high-value-add bioengineered proteins.

Building and testing new proteins in labs can take considerable time, which slows down innovation. AI-driven optimization can break such logjams. Our portfolio company Tierra uses both automation and AI, as well as novel chemistry that eliminates the need to maintain living cells, to streamline the parallel synthesis of hundreds—and, ultimately, thousands—of novel proteins, thus helping its customers to develop and commercialize new products faster.

AI promises to be a force multiplier in other areas of US manufacturing too. Using algorithms to enhance processes can help accelerate manufacturing timelines and reduce production costs. With that in mind, another of our portfolio companies, nTop, is developing and selling software incorporating AI that makes it easier for its customers to design parts and optimize them for manufacturing. Markforged has also launched an adaptive manufacturing platform called Blacksmith that connects part design, production, and inspection with a powerful AI.

Material improvements

Another area that can help develop an even more dynamic and resilient manufacturing base in the US is materials innovation. Our portfolio company Fortify is a great example of the potential here. Based in Boston, Fortify manufactures radio frequency components for use in telecommunications infrastructure such as 5G systems and has developed a novel dielectric material used for manufacturing components and devices used in wide-bandwidth, high-frequency communications and sensing systems.

Innovations in materials and advanced manufacturing techniques are also going to be key to developing a more robust domestic microelectronics ecosystem and IQT is actively investing in a range of businesses pioneering new approaches here. Our in-house technology experts helped inform the 2022 CHIPS Act, which is directing billions of dollars towards creating new US-based chip manufacturing facilities.

We’re encouraged by such initiatives—and by the inspirational work we see every year as we meet with more than a thousand young companies, many of whom are dreaming up new and more efficient ways to build things. This will remain a vital area of focus for IQT in the years ahead and we’re looking forward to using our global investment platform to support our portfolio companies and our government partners as we work together to create even more innovative and resilient manufacturing capabilities in America.

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