Ethereal Machines raises $28.5 million in Series B led by Avataar Ventures to scale precision manufacturing

Deep-tech manufacturing startup Ethereal Machines has raised $28.5 million in a Series B funding round led by Avataar Ventures, with participation from existing investor Peak XV Partners and others, as the company looks to deepen India’s capabilities in advanced precision manufacturing.

The Bengaluru-based company said it will use the fresh capital to expand manufacturing capacity, develop India’s first domestic multi-axis CNC controller, strengthen its software stack, and accelerate international expansion across the United States and Europe.

The fundraising comes nearly two years after Ethereal Machines raised $13 million in a Series A round in June 2024. Since then, the company says it has tripled its Machining-as-a-Service (MaaS) revenue and expanded production capacity tenfold across its smart factory operations.

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Founded in 2014 by Kaushik Mudda and Navin Jain, Ethereal Machines designs and manufactures proprietary CNC machines and precision-engineered components for industries including aerospace, defence, healthcare, semiconductors, and consumer electronics. The company currently operates what it describes as India’s first fully automated smart manufacturing facility in Bengaluru’s Peenya industrial area.

As part of its next phase of growth, Ethereal Machines plans to build a 300,000-square-foot mega-factory on the outskirts of Bengaluru under a previously signed memorandum of understanding with the Karnataka government. The facility is expected to create more than 2,000 jobs and become one of the largest advanced manufacturing facilities outside China, according to the company.

A key focus area for the startup will be the development of India’s first proprietary multi-axis CNC controller, a critical technology that governs machine movement and precision. India currently relies heavily on imported precision manufacturing equipment from countries such as Germany and Japan.

The company is also investing further in Vesper, its proprietary factory operating software that uses artificial intelligence to predict manufacturing lead times, monitor factory performance and optimise production workflows.
Commenting on the fundraiser, co-founder and CEO Kaushik Mudda said the company aims to position India as a global hub for high-precision manufacturing as multinational firms diversify supply chains beyond China.

The investment comes at a time when global manufacturers are increasingly looking to diversify supply chains under the “China+1” strategy. According to the company, the global precision manufacturing market is currently estimated at $220 billion and is expected to grow to $400 billion by 2030.
Ethereal Machines counts Peak XV Partners, Blume Ventures, Avataar Ventures and Intel CEO Lip-Bu Tan among its backers.