Ethereal Machines Secures $28.5 Million in Series B Funding

Ethereal Machines, a deep-tech precision manufacturing startup, has successfully raised $28.5 million in a Series B funding round. This round was led by Avataar Ventures, with contributions from existing investor Peak XV Partners and additional backers. This new influx of capital follows a prior $13 million raised during its Series A round in June 2024, marking a significant growth period for the company. Notably, Startup Superb had previously reported in April that Ethereal Machines was in discussions to secure $28.5 million with a valuation premium of 4x.

Investment Utilisation

The new funding will be directed towards expanding the manufacturing infrastructure, creating India’s first indigenous multi-axis CNC controller, enhancing the software stack, supporting semiconductor manufacturing initiatives, and boosting international expansion efforts in the US and Europe.

Company Overview

Founded in 2014 by Kaushik Mudda and Navin Jain, Ethereal Machines specializes in designing and manufacturing proprietary multi-axis CNC machines. The company also provides precision component production through its Machining-as-a-Service (MaaS) platform, catering to various sectors, including aerospace, defence, healthcare, semiconductors, consumer electronics, and other high-precision engineering fields.

Growth Highlights

The Bengaluru-based startup has seen a threefold year-on-year growth in its MaaS revenue since the Series A round, alongside a tenfold increase in production capacity. Currently, Ethereal Machines operates a fully automated smart manufacturing facility located in Peenya, Bengaluru, and has formalized a Memorandum of Understanding (MoU) with the Karnataka government to set up a 300,000-square-foot manufacturing plant in the city’s outskirts.

Job Creation and Future Plans

The new plant is projected to generate over 2,000 jobs and aims to be one of the largest automated advanced manufacturing facilities outside of China. Furthermore, the company plans to continue investing in Vesper, its proprietary factory operating software that uses AI to predict lead times, monitor performance in real-time, and optimize production workflows.

Technological Innovations

Ethereal Machines has also introduced proprietary CNC platforms, namely Aura and Nimbus, which offer sub-10-micron accuracy. These systems are acclaimed for enabling high-precision manufacturing at considerably reduced costs than those of global competitors.

Financial Performance

In fiscal year 2025, Ethereal Machines reported an operating revenue of Rs 11.45 crore, based on its annual financial statements. However, the company also incurred a loss of Rs 27.27 crore during the same time frame as it continued its investments in manufacturing capacity, technological advancements, and expansion initiatives.

Industry Trends

This investment arrives at a crucial moment when global supply chains are increasingly shifting away from China. Ethereal Machines is poised to leverage this trend by developing domestic capabilities in precision engineering, positioning itself as a leading global supplier of advanced manufacturing solutions.