Daedalus GmbH, a contract manufacturing startup based in Germany, today announced that it has closed a $21 million Series A investment.

The round was led by NGP Capital, a venture capital firm focused on the enterprise software market. Daedalus says that returning backers Addition and Khosla Ventures participated as well.

Companies that make physical goods typically rely on a network of suppliers, or contractor manufacturers, to provide them with components. Some types of components must be produced in large volumes. Others, such as industrial equipment parts, are made in small quantities but often require a significantly higher level of precision during manufacturing.

Daedalus operates a 50,000-square-foot factory in Karlsruhe, Germany, where it makes both types of components for customers. It can also produce prototypes of newly designed parts. According to Daedalus, the factory makes components for clients using off-the-shelf manufacturing equipment powered by an internally developed artificial intelligence platform.

The process of turning a blueprint into a physical product involves a significant amount of manual work. A contract manufacturer has to configure its industrial equipment to produce the component, as well as make adjustments on an ongoing basis. In some complex projects, the machinists who operate the equipment must receive specialized training before production can begin.

Daedalus says the AI platform it developed for its factory automates much of this manual work. According to TechCrunch, the software does so in part by studying how a component is produced and applying the lessons it gleans to other projects with similar parameters. Daedalus claims its approach not only streamlines manufacturing but also reduces the amount of specialized training that machinists must receive before a new project.

The company’s factory can make parts from steel, aluminum, copper and plastic. Daedalus also works with more specialized materials such as tool steel, an umbrella term for a set of metals commonly used to make industrial equipment. Those metals are suitable for the task because they’re durable and can maintain sharp edges when operating in high temperatures.

Daedalus can turn raw materials into finished parts using several methods. It has machines suitable for milling, which is the process of forming a piece of metal into a specific shape using rapidly rotating cutters. The company can also make components through turning, a similar manufacturing approach that involves rotating the metal piece being processed rather than the cutters.

Daedalus gives customers the option of coating the parts they order with additional materials or sandblasting them to smooth their surface. Once a component rolls off the production line, It uses a so-called optical coordinate measuring machine to check if quality standards are met. Such machines measure the dimensions of a newly manufactured part to determine whether it contains faults. 

“There is still $100 billion in annual demand we have not yet touched in Germany alone, and we’re seeing demand from our existing customers exceed our capacity several times over,” said Daedalus founder and Chief Executive Officer Jonas Schneider. “At the same time, we see many software features we can build to improve customer experience and internal efficiency further.”

The funding round Daedalus announced today will help the startup finance its software development efforts. Additionally, it will use a portion of the proceeds to open a second factory in Germany. Daedalus says that it already produces parts for companies in several markets including the semiconductor, defense, energy, transportation and medical device segments.

Image: Daedalus