Industry: Contract Manufacturing
Products: Carbon fiber parts
CEO Jonathan Hollander is reinventing composites manufacturing with an eye on the automotive mass market.
Hollander has a somewhat unexpected entry point for someone focused on innovation with carbon fiber. “I got introduced to this field 10 years ago,” he says.
His portal wasn’t manufacturing. The former patent attorney went to an art exhibit where a sculptor had crafted a Moebius strib and other shapes by knitting together strands of carbon fiber.
Hollander says he wondered, “Why aren’t they doing his with practical objects, like airplane wings and kayaks?”
The artist answered his question: “I did all this knitting by hand. I don’t think that machine exists.”
That reply has guided his career for the ensuing decade. The realization that composite manufacturing was a largely manual process opened Hollander’s eyes to a massive opportunity in manufacturing. “It was Boeing making fighter jets by hand,” he says. “It’s ridiculous.”
The billion-dollar question? “Why hasn’t [automation] happened to composites?” says Hollander. “I got this bug in my head I was going to solve this problem.” About six years of research and tinkering later, he incorporated Seriforge to commercialize “a system to make complicated shapes relatively inexpensively.”
His co-founder, Eric Gregory, had a background in robotics and animatronics. They’d met while Gregory worked at Pixar, one of Hollander’s clients at the time.
After two years of R&D, the first prototype was completed in 2016, and the first production machine came online in May 2018. “We just transitioned to production,” says Hollander, noting that the number and volume of orders is increasing month by month. “We’ve been ramping up making more parts for our customers,” he adds. “We’re building several more machines this year.”
The model is to scale as a service provider and contract manufacturer. The short-term market is the oil and gas industry; the long play is all about automotive.
“We’ve found a really good beachhead market in energy — oil and gas,” says Hollander, noting that Seriforge is able to make a higher-performing high-pressure plug for drillers. “They said, ‘These are the strongest parts we’ve ever tested. How soon can we get more of them?’ We had an unlikely hit on our hands.”
Oil and gas provides a baseline as Seriforge looks to become a supplier for Detroit. “Long-term, we’re really focused on mass-market automotive,” says Hollander. Carbon fiber is lighter than comparably strong traditional structural materials, especially key when it comes to electric vehicles. “A lighter car needs a smaller battery,” says Hollander. “We’re going to see an enormous change in how cars are made over the next 10 years or so.”
And a big part of that change will be the move from steel and aluminum to carbon fiber for structural parts like the frame and suspension components. But composites manufacturing needs innovation to scale up to the needs of the automotive industry.
The status quo involves cutting pieces from a roll of carbon fiber fabric and fitting them to a mold and applying epoxy. In other words, it’s excruciatingly manual. “You shouldn’t spend all your time forming carbon fiber to the mold,” says Hollander. “The mold is very expensive. You want to run it as fast as possible.”
He adds, “What our secret sauce is we figured out how to sew carbon fiber into a complicated, three-dimensional shape.”
Previous attempts at automation often ended up destroying the carbon fiber with the thread, but Seriforge’s patented process avoids that outcome.
Dubbed CZR — short for continuous Z-Axis reinforcement — the technology is able to sew in three dimensions and bring the necessary speed for mass production. Hollander says the process cuts manufacturing costs for carbon fiber parts by as much as 90 percent.
The strategy is to grow “as quickly as possible,” says Hollander. That likely include new facilities in the Bay Area and beyond. Houston and Detroit would be likely locations for industry-specific production facilities. “We’re producing hundreds of parts per year right now,” he adds. “We’re expecting thousands of parts per month by the end of the year.” Hollander forecasts $5 million in revenue for 2019.
The company closed on a Series A round in 2017; details were not disclosed. Hollander says Seriforge will pursue a Series B in 2019. “We’re really focused on scaling,” he notes. “It’s just a matter of building more machines and staffing a factory floor to run them.”
Challenges: “Right now, it’s hiring people, especially factory workers,” says Hollander. “It’s really hard to find semi-skilled labor.” The company’s current recruitment strategy is a “shotgun approach,” he adds. “We’re working with SFMade and Daughters of Rosie.”
There’s a second challenge that involves changing industry perception. “It’s the mindset in industries that traditionally use metal. To switch to carbon fiber, there’s definitely an education process to realize the potential of the material.”
Opportunities: As of 2018, the total market for parts made of carbon fiber is estimated at about $22 billion, says Hollander, and growing at a clip approaching 15 percent a year. “There’s definitely a sea change happening right now,” he notes. “Just the one part we’re manufacturing for oil and gas, the total market size is $200 million.”
Beyond the primary markets of automotive and oil and gas, Seriforge sees “secondary” opportunities in aerospace and consumer products.
Needs: Space. The company’s 8,000-square-foot facility in San Francisco isn’t big enough for high-volume manufacturing, but will remain headquarters and R&D hub for the long term. “We’re looking at a secondary space right now,” says Hollander. “By early next year, we’ll be looking for a bigger space for our factory.”
That will need to accommodate about 20 machines. “I don’t think it’s necessarily going to be in the city,” he says. “We’d like to stay in the Bay Area.”