Shapeways, the Dutch upstart that brings rapid-prototyping to the masses, is one step closer to becoming a custom-manufacturing juggernaut. The company will announce today that it has raised $5 million in Series A venture capital and will move its headquarters to New York.

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The new funding round, led by Index Ventures in London and Union Square Ventures in New York (the same firm that backed Twitter and Etsy), will let Shapeways expand its hold on the U.S. market — and perhaps beyond. It’s a remarkable rise for a company that got its start just a few years ago as a tiny subsidiary of the Dutch electronics company Philips producing small volumes of custom goods in Europe. (Philips is retaining its shares in the company.) Today, Shapeways is the rapid-prototyping manufacturer for designers and DIYers who want high-quality, relatively inexpensive 3-D-printed wares in an improbably vast selection of materials, from plastic and sandstone to glass and bronze. Shapeways also operates an Etsy-style marketplace that allows people to hawk their work in online shops — a boon to independent designers who’d normally have to cozy up to a mainstream manufacturer to bring anything to market. Shapeways’s output has grown from 600 products a week to 2,500 in less than two years; that’s allowed them to drop prices to a third of what they were in 2008. And it’s still growing. Here, we’ve got an exclusive interview with Shapeways founder Peter Weijmarshausen. Weijmarshausen, 39, is a physicist by training, with a background in management and a penchant for Internet geekery. He talks to us about Shapeways striking out on its own, relocating to New York, and the future of rapid prototyping. FastCompany.com: How did the funding deal unfold? Peter Weijmarshausen: Shapeways started within the Lifestyle Incubator of Philips — a program for new, revolutionary business concepts. A few things could have happened within the venture. Part of venturing is that if there are failures, you stop. If there are successes, they can either become part of Philips or, in the case of Shapeways, they spin out. So in 2008, when we launched, we had a discussion internally: “What should we do with the future of Shapeways?” And we agreed that the best plan would be an independent venture.

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Did you seek out venture capital or did Union Square and Index Ventures find you? We started to research and reach out, but of course, in these times, it wasn’t that easy. And Shapeways is such a new concept. Are we a Web company? No, not really because we have real production. And if you go to production VCs, they say, “Well, all this Web and marketing, we don’t really understand what you’re doing.” So it was quite an interesting route to find venture funds. Why move your headquarters to New York? The United States is our single largest market. We produce most of our goods in Europe and we ship through our European company, but we want to start production in the United States. One of the aspects of the Shapeways business plan is that we set up multiple production facilities so you produce closer and closer to your users, which reduces shipping costs and lead times. Then we have ambitious goals on top of that. We want to extend our team. We want to have new people. And we have both a design and a technology aspect to the company. So where do you go in the United States? Well if you want talented, highly entrepreneurial people, you go to New York.

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How will the new venture bring down costs? Having a second production facility — hopefully by the end of the year — will mean we’re not shipping across the Atlantic Ocean anymore. Also, our customers won’t have to pay import duties. In the future, we’ll have a multi-location network with several production facilities in the United States, several in Europe, several in Asia, and the closest to you will produce your goods and send it to you. Or you can pick it up. Who knows? Maybe we’ll be the Kinko’s of 3-D printing. Is the company profitable? What sort of growth are you projecting? When we launched our shops in early 2009, we had a few shops. Now we have 1,100. Some of them are making $1,000 in profit every month. That number is growing. In early 2009, we were making a few hundred models a week. Now, we’re doing in excess of 2,500 every week. That’s unique products. That’s major growth. Looking ahead, think if 1 percent of the products in the world were to become customized — that would be a multi-billion market. We could be a big player. That’s a way to look at how big this could become.

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Is it still a high-margin business? We don’t want it to be. Since we started, our cost to produce has dropped by a factor of three. And we’re continuing to push costs down aggressively. By doing that we will not increase our margins, we will give them back to our community. So what we continually promise is, “Guys, if our volume increases, because of our efficiency and economies of scale, we can reduce costs and give back.” We’re making it a low-margin business. Who is your ideal customer? Designers? No, anyone! What is starting to happen — and you see it everywhere, if you go to Zazzle or Cafe Press or Etsy — is that today’s consumer isn’t happy with mass-produced goods. You want to stand out from your neighbor. The only thing that is hard is that things are affordable when they’re mass produced. So how do you produce unique goods? That’s where 3-D printing enters the picture. CAD software used for 3-D modeling is still really hard — it’s not something most grandmas can do. Is there something else you’re doing to bring 3-D printing to a mass market?

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Definitely — customizable products. My mother is a grandma. She made napkin rings by going on Shapeways, typing text, and ordering it. That’s all you have to do. We have over 800 items that you can easily customize on our site. So even people without CAD software can make something. Beyond product templates, we have a draw-it concept where you draw something on a paper and the software automatically turns it into earrings, say. But we’re just starting to explore those possibilities. And customers can pick from a huge range of materials: glass, gold-plating, and so on. How are you able to offer so many different materials? Suppliers see that we’re rapid-prototyping continuously. So now, they’re saying, “Shapeways, can we help? What can we do, should we do, to make this better?” They’re listening to the demands of the market. Because of that, you get a self-enforcing effect, where the feedback from the market will help make the machines better. The machines will make the products better. People buy more. It’s just like what happened with the Internet. Why do you think this company started in the Netherlands as opposed to somewhere else? Technology-wise, it sounds easy, but it isn’t. We needed money to do this. And Philips was the perfect starting ground. Where do you see the company in the next few years?

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We already have a number of customizable products, but we want to enlarge that number. We want to make it easier to make what you want — and not only what you want, but in the material you want. So we want to add precious metals and maybe ceramics. Also: Our prices are good, but we’re working hard to make them better through negotiation, volume, smart thinking, and hard work. Where do you see rapid prototyping in the future? Making creation simpler. Everyone writes about 3-D printing, and the first question is always, When is the first printer on your desktop?’ It’s not the right question. Yes, it will be on your desk. But what are you going to make with it? Either you have to learn 3-D software, which is hard and most people cannot learn it because it’s complex. I, for one, cannot. Or you need to find a way to make content accessible. A customization platform is something people would love to use because they get whatever they want in an easy way. Our only rule about what we make is: We like to keep it decent and no weapons. Everything else is possible. For more stories about 3-D printing, start here: How 3-D Printing Opens Billion-Dollar Markets to Regular Joes An Impossible Object That Would Make M.C. Escher Drool [Video]

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