Ethereal Machines raises $28.5 million in Series B to expand precision manufacturing capacity

Deeptech manufacturing startup Ethereal Machines has raised $28.5 Mn (about ₹272 Cr) in its Series B led by Avataar Ventures with participation from existing investors

The startup will use the funds to build a mega-factory, develop indigenous CNC technology and expand globally

Founded in 2014 by Kaushik Mudda and Navin Jain, Ethereal Machines designs, builds and operates proprietary multi-axis CNC (Computer Numerical Control) machines

The startup said it will use the fresh capital to build a 3 Lakh sq ft mega-factory near Bengaluru, invest in its AI-powered factory operating software Vesper, and develop what it claims will be India’s first indigenous multi-axis CNC controller.

A portion of the raised funds will also go towards expanding its footprint in the US and Europe. The startup said it will further strengthen its presence in India’s semiconductor ecosystem by supplying high-precision components for chip manufacturing infrastructure.

With the latest round, Ethereal Machines has raised nearly $50 Mn in total funding to date, including a $13 Mn Series A round co-led by Peak XV Partners and Steadview Capital in 2024.

Founded in 2014 by Kaushik Mudda and Navin Jain, Ethereal Machines designs, builds and operates proprietary multi-axis CNC (Computer Numerical Control) machines.

Its flagship platform, Nimbus, delivers sub-10-micron accuracy at production scale. Through its Machining-as-a-Service (MaaS) model, the startup serves customers across aerospace, defence, healthcare, semiconductors and consumer electronics from its factory in Bengaluru.

For context, CNC machines are automated manufacturing machines that use computer software to control tools such as drills, lathes, mills and cutters.

Since its last funding round in 2024, the startup claims to have grown its MaaS revenue 3X year-on-year and expanded its production capacity 10X. It currently operates what it claims is India’s first fully automated smart manufacturing facility in Peenya, Bengaluru, running round-the-clock across three shifts.

During this period, it launched Aura, a three-axis CNC machine, and Nimbus, a five-axis CNC machine, both capable of achieving sub-10-micron accuracy.

“Ethereal Machines is building that foundation from precision CNC systems to intelligent factory software and large-scale automated manufacturing. This capital allows us to accelerate that journey and position India as a trusted global hub for high-precision manufacturing,” cofounder & CEO Mudda said.

The funding comes amid rising investor interest in deeptech startups, with several VC firms launching dedicated funds for the sector.

More recently, Fundamentum Partnership cofounder Ashish Kumar launched F2A, which has secured SEBI approval for a ₹2,000 Cr AIF, to invest in AI-native and deeptech startups, with Nandan Nilekani as an anchor investor.

Separately, Piper Serica launched ₹800 Cr Bharat Tech Fund to support technology-focused startups. Shastra VC also launched a $100 Mn fund to back early-stage deeptech, AI and climate science startups.