Ethereal Machines, a Bengaluru-based deep-tech startup specializing in precision manufacturing, has successfully secured $28.5 million in a Series B funding round led by Avataar Ventures. The funding, which also saw participation from existing investor Peak XV Partners, arrives nearly two years after Ethereal Machines raised $13 million in its Series A round. The new capital infusion is poised to significantly bolster the company’s manufacturing capabilities, facilitate the development of India’s first indigenous multi-axis CNC controller, and support international expansion efforts.
### The Rise of Ethereal Machines
Founded in 2014 by Kaushik Mudda and Navin Jain, Ethereal Machines has carved a niche for itself by designing and manufacturing proprietary multi-axis CNC machines. The company also offers precision component production through its Machining-as-a-Service (MaaS) platform, catering to a diverse range of industries, including aerospace, defence, healthcare, semiconductors, and consumer electronics. The startup’s innovative CNC platforms, Aura and Nimbus, are noted for delivering sub-10-micron accuracy, setting them apart from global competitors by offering high-precision manufacturing at reduced costs.
Ethereal Machines’ growth trajectory has been impressive, with its MaaS revenue tripling year-on-year since the Series A round. The company operates a state-of-the-art smart manufacturing facility in Peenya, Bengaluru, and plans to establish a massive 300,000-square-foot manufacturing facility on the outskirts of the city, in collaboration with the Karnataka government. This expansion is expected to create over 2,000 jobs and position the facility as one of the largest automated advanced manufacturing sites outside China.
### Funding and Competitive Landscape
The Series B funding round comes amid a global shift in supply chains, as companies look to diversify beyond China. This trend presents a significant opportunity for Indian manufacturing firms like Ethereal Machines to enhance domestic capabilities in precision engineering and establish themselves as global suppliers of advanced manufacturing solutions. Ethereal Machines aims to capitalize on this opportunity by leveraging the new funds to expand its manufacturing infrastructure and strengthen its software stack, including its proprietary factory operating software, Vesper.
In the competitive landscape, Ethereal Machines faces competition from both domestic and international players. However, its focus on innovation and cost-effective solutions provides a competitive edge. The company reported operating revenue of Rs 11.45 crore in FY25, though it posted a loss of Rs 27.27 crore, largely due to ongoing investments in manufacturing capacity, technology development, and market expansion.
### Implications for India’s Startup Ecosystem
Ethereal Machines’ latest funding round underscores the growing investor confidence in India’s deep-tech startups, particularly those in the manufacturing sector. As the country seeks to reduce dependency on imports and bolster its manufacturing capabilities, companies like Ethereal Machines play a crucial role in advancing this agenda. The startup’s commitment to developing indigenous technology and expanding its global footprint aligns with broader national objectives to position India as a manufacturing powerhouse.
What happens next for Ethereal Machines will be closely watched by investors and industry stakeholders. The successful execution of its expansion plans and the development of its CNC controller could set a benchmark for other Indian startups in the precision manufacturing sector. For founders and investors, Ethereal Machines’ journey offers valuable insights into scaling deep-tech ventures in a competitive global market. The next key development to monitor will be the operationalization of its new manufacturing facility and its impact on the company’s production capabilities and market reach.
