Deep-tech manufacturing startup Ethereal Machines has successfully raised $28.5 million in a Series B funding round led by Avataar Ventures, with participation from existing investor Peak XV Partners and other investors including Novellus Systems, Sustained Innovations, Eventures India, and Indigo Circle Advisors. According to regulatory filings, the ₹264.5 crore round values the Bengaluru-based company at approximately ₹1,470 crore, representing a 3.8X jump from its ₹383 crore valuation during its Series A round in June 2024. The company issued Series B preference shares at ₹90,536 apiece, with Avataar Ventures investing around ₹199.55 crore, Peak XV Partners contributing ₹30.7 crore, and Novellus Systems adding ₹27.9 crore. Avataar Ventures will hold close to a 13.69% stake after the round, while the startup also counts Blume Ventures and Intel CEO Lip-Bu Tan among its earlier backers.
As part of its next phase of growth, Ethereal Machines plans to build a 300,000-square-foot mega-factory in Doddaballapur, on the outskirts of Bengaluru, which will be roughly six times the size of its current facility. According to regulatory filings, the proposed plant will be built in phases starting later this year and is expected to create more than 2,000 jobs and become one of the largest automated advanced manufacturing facilities outside China. The company currently operates what it describes as India's first fully automated smart manufacturing facility in Bengaluru's Peenya industrial area, spanning three lakh square feet and employing over 2,000 people, operating 24×7 across three shifts. The company aims to scale from more than 60 machines today to over 1,000 units.
A core focus of the round is the development of India's first proprietary multi-axis CNC controller, a project that has been in development for more than four years. Co-founder and CEO Kaushik Mudda described the controller as the 'brain and nervous system' of a CNC machine, positioning it as a sovereign technology capability for India. The company is also investing further in Vesper, its AI-powered factory operating software that uses artificial intelligence to predict manufacturing lead times, monitor factory performance in real time, and optimise production workflows. This full-stack approach allows Ethereal Machines to operate at 1/6th the cost of global peers, as noted by Avataar Ventures Partners Anirudh Singh. The company's proprietary CNC platforms, Aura and Nimbus, deliver sub-10-micron accuracy at what it claims are significantly lower costs than global competitors.
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, consumer electronics, and energy infrastructure. Through its Machining-as-a-Service (MaaS) model, the company serves global clients across these sectors from its smart factory in Peenya, Bengaluru. The company reported operating revenue of ₹11.45 crore in FY25, alongside a loss of ₹27.27 crore as it continued to invest in manufacturing capacity and technology development. Since its Series A round, the company says its MaaS revenue has tripled year-on-year and production capacity has expanded tenfold. Around 70% of Ethereal Machines' revenue currently comes from exports to the US, Europe, UK, and Japan, though the company expects domestic demand to rise as local manufacturing activity accelerates. India consumes roughly $2.2 billion worth of CNC machines each year, of which about $1.2 billion is imported.
The funding signals growing investor confidence in India's ability to manufacture complex, high-precision components locally, with execution of the Doddaballapur facility now a key milestone to watch. The global precision manufacturing market is currently estimated at $220 billion and is expected to grow to $400 billion by 2030, creating an opportunity for Indian manufacturers to capture a meaningful share under the global "China+1" supply-chain diversification trend. While aerospace and healthcare were initially Ethereal's primary markets, semiconductor manufacturing, consumer electronics, and energy infrastructure have emerged as major growth areas. Demand from power-generation equipment makers, driven by the expansion of AI infrastructure and data centres, has also picked up in recent months. The controller segment remains concentrated among global suppliers such as Fanuc, Siemens, and Heidenhain, underscoring the strategic value of a homegrown alternative.
