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Monday, Dec 4, 2023

Modernizing Manufacturing: Divergent Raises $230M to Aid Growth

Torrance-based Divergent Technologies Inc. wants to reshape the manufacturing process by converging artificial intelligence-driven generative design, 3D printing hardware and robotic assembly. With a recent $230 million series D funding round that closed earlier this month, the company is growing its operations and scaling up research into new manufacturing material and factory locations.

Divergent has been operating in the design software and 3D printing field since 2014, and previously raised $160 million of series C funding in April of last year. The company is led by its founder and chief executive, Kevin Czinger, with his son, Lukas Czinger. Lukas, who serves as chief operating officer, said that Divergent is both a software and a hardware business, and that the flexibility of its design hardware allows clients to quickly change and adapt products to match customer demand.

“Most startup companies are focused on a very specific pain point or value add to a traditional solution, and they build their companies structured around that first principle,” Lukas Czinger said. “We looked more holistically at a system overall that could replace the analog system … (for) how parts are designed, manufactured and assembled today.”

Divergent’s operations are built on an additive manufacturing system, meaning the construction of products from a 3D model, that it calls the Divergent Adaptive Production System. This is built on three pillars of technology, all of which were developed in-house: the first is an AI-powered generative design software that creates blueprints for parts and systems, which are then produced by its 3D printing machine hardware.

The 3D printers can produce complex structures while minimizing the number of individual parts needed to create a product, increasing manufacturing efficiency and opening up the options for what materials can be used.

For energy and defense company General Atomics, Lukas Czinger said Divergent took a drone structure and reduced it from about 180 parts to four parts.

The facility then uses industrial robotic arms to build the products, which run on a system architecture developed by Divergent.

Additive manufacturing

Czinger said the company has about 130 patents on the robotic assembly solution technology, with more than 500 patents filed overall for the DAPS. Given a blueprint, the printing hardware and robotic assembly system can pivot production plans quickly, meaning that assembly can be scaled and changed by altering the design rather than creating a whole new production line.

“DAPS was created to serve as the foundation for a global system of regional manufacturing facilities that combine and fully exploit supercomputing, AI, robotics and additive manufacturing in a novel way,” Kevin Czinger said in a statement. 

Additive manufacturing has been highlighted by experts for its ability to enable higher production efficiency, allow greater customization and shorten time to market, with consultants from McKinsey & Co. saying the economic impact from additive manufacturing could reach between $100 billion and $250 billion by 2025 if industry adoption continues.

“(It’s) a system that is robust to changes in product demand, changes in product requirements and incoming competition,” Lukas Czinger said. “You can make changes almost in real time to your design inputs or your customer inputs. You no longer have this concentrated financial risk and tooling that you need to amortize. Instead, now you have a flexible system that is anti-fragile … and can grow with actual customer demands and product requirements.”

Financing for manufacturing

Offices: Divergent is based in Torrance.

According to Crunchbase, 3D printing companies have raised about $700 million this year, compared to about $1.7 billion in 2021. Other local 3D printing and additive manufacturing companies that recently received financing include Hawthorne-based Freeform Future Corp., which launched in February with $45 million of funding, and Chatsworth-based Machina Labs, an advanced manufacturing company leveraging AI and robotics that closed a $32 million series B funding round last month.

To Lukas Czinger, digital design is a “hot topic” right now due to its ability to change the cycle of design and manufacturing. He said additive manufacturing as a concept initially faced opposition from investors and companies due to concerns about the quality of 3D printed products and the cost of maintaining the machines.

“For a long time, it was unclear, and you had a lot of opposition asking if additive manufacturing was production ready, and individuals saying it will stay in the research and development phase because of quality concerns or cost concerns,” Lukas Czinger said. “In the last two years, you now see aerospace, defense and automotive saying this is going to enter zero production and the question is just really when, and with who. That’s a positive narrative, I think, that’s going to help drive the success of Divergent and other companies operating in a similar space.”

Using the tech

Besides its external clients, which includes six defense contractors, Divergent is using its own software to design new products.

Czinger Vehicles, a subsidiary of Divergent that’s also based in Torrance, will soon be bringing its own products to market, and has designed a hybrid sport car called the 21C. The 21C will be released next year in a limited run, with about 80 cars available starting at $2 million each. 

“(Czinger Vehicles is) making something incredibly costly, but they’re doing the first instance of these innovative products like lighter electric vehicle systems, higher power displacement combustion systems (and) different arrow profiles for cars,” Lukas Czinger said. “It starts out very expensive, but then Divergent kind of recycles those ideas and eventually brings them to market at scale with high volume manufacturers.”

Divergent designs, produces and assembles products and parts at its Torrance facility, then ships to customers, which include Mercedes-Benz and Aston Martin Lagonda Global Holdings PLC. Divergent has approximately 250 employees, and Czinger Vehicles employs about 90 people.

Lukas Czinger said Divergent’s series D financing, which was led by Hexagon AB, will go toward two main goals: further research and development and growing its “factory footprint,” with the hope to someday have more than 100 Divergent facilities around the world.

It is looking to open its next manufacturing location in the European Union, followed by the United Kingdom, based on the location of where its core customers are, though Lukas Czinger said that shipping products to customers is currently cost-effective.

“We’ve seen such an increased, and also time sensitive, demand out of aerospace and defense that quite a bit of that capital goes into building capacity here in the Torrance facilities to support aerospace and defense,” Lukas Czinger said. “Beyond that, it’s looking towards the research and defense projects that we have underway. The most significant ones with it are additive manufacturing, and our materials design, making new advanced material types that can work for different products, for example, hypersonic products.”

Hannah Madans Welk
Hannah Madans Welk
Hannah Madans Welk is a managing editor at the Los Angeles Business Journal and the San Fernando Valley Business Journal. She previously covered real estate for the Los Angeles Business Journal. She has done work with publications including The Orange County Register, The Real Deal and doityourself.com.

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