Ethereal Machines, a deeptech startup specializing in precision manufacturing, has successfully raised $28.5 million in a Series B funding round. This investment, led by Avataar Ventures with participation from existing investor Peak XV Partners, marks a significant step for the Bengaluru-based company as it seeks to expand its manufacturing capabilities and international presence. The funds will be used to construct a 3 lakh square foot mega-factory near Bengaluru, enhance their AI-powered factory operating software Vesper, and develop India’s first indigenous multi-axis CNC controller.
### Ethereal Machines’ Vision and Growth
Founded in 2014 by Kaushik Mudda and Navin Jain, Ethereal Machines has carved a niche in the precision manufacturing sector with its proprietary multi-axis CNC (Computer Numerical Control) machines. Their flagship platform, Nimbus, delivers sub-10-micron accuracy, catering to industries such as aerospace, defence, healthcare, semiconductors, and consumer electronics. Operating on a Machining-as-a-Service (MaaS) model, Ethereal Machines aims to revolutionize manufacturing by integrating precision CNC systems with intelligent factory software to create a robust automated manufacturing ecosystem.
Since its $13 million Series A round in 2024, the company has seen substantial growth, reportedly tripling its MaaS revenue year-on-year and expanding its production capacity tenfold. Ethereal Machines operates India’s first fully automated smart manufacturing facility in Peenya, Bengaluru, which functions continuously across three shifts. The company has also launched Aura, a three-axis CNC machine, and Nimbus, a five-axis CNC machine, both capable of achieving high precision.
### Context and Competitive Landscape
The recent funding round highlights the increasing investor interest in deeptech startups within India’s burgeoning tech ecosystem. The deeptech sector is witnessing a surge in dedicated funds, as evidenced by the launch of F2A, a ₹2,000 crore AIF, by Fundamentum Partnership cofounder Ashish Kumar, focusing on AI-native and deeptech startups. This aligns with a broader trend of venture capital firms prioritizing investments in advanced technology domains such as AI and precision manufacturing.
Ethereal Machines faces competition from both domestic and international players in the precision manufacturing domain. However, its focus on developing indigenous technology and expanding its footprint in global markets like the US and Europe could provide a competitive edge. By supplying high-precision components for chip manufacturing infrastructure, Ethereal Machines aims to strengthen its position within India’s semiconductor ecosystem.
### Implications for India’s Startup Ecosystem
Ethereal Machines’ successful funding round and ambitious expansion plans signal a promising future for deeptech innovation in India. The company’s efforts to establish a large-scale automated manufacturing hub near Bengaluru could position India as a key player in the global high-precision manufacturing market. This development is likely to inspire other Indian startups to pursue advancements in precision technology and manufacturing, potentially attracting more international investors to the Indian tech landscape.
As Ethereal Machines continues to grow, it will be crucial for founders, engineers, and investors to monitor the company’s progress in developing its indigenous multi-axis CNC controller. This technological advancement could significantly enhance India’s capabilities in precision manufacturing and pave the way for further innovation in the sector.
