Ethereal Machines Raises $28.5 Million Series B to Advance India’s Deep-Tech Manufacturing Revolution and Sovereign Industrial Capabilities
Ethereal Machines, India’s leading deep-tech precision manufacturing company, today announced it has raised $28.5 million in a Series B round led by Avataar Ventures, with participation from Peak XV Partners and other investors. The capital will be deployed to advance India’s self-reliance in advanced precision manufacturing, equipping domestic and international aerospace, defence, and healthcare industries with the high-tolerance components they have historically been forced to import.
The round follows a period of rapid growth. Since its $13 million Series A in June 2024, Ethereal Machines has grown its Machining-as-a-Service (MaaS) revenue 3X year-over-year and scaled production capacity 10X across its Smart Factory operations. The company now runs India’s first fully automated smart manufacturing unit in Peenya, Bengaluru, operating 24/7 across three shifts, and has signed an MoU with the Government of Karnataka to establish a 300,000 sq. ft. mega-factory on the outskirts of the city. During this period, it also launched Aura (3-axis) and Nimbus (5-axis), proprietary CNC machines achieving sub-10-micron accuracy — a first for Indian manufacturing — and expanded its client base across aerospace, defence, healthcare, semiconductors, and consumer electronics.
The capital will be deployed across five key priorities:
Mega-Factory Build-Out: Build a 300,000+ sq. ft. facility to help create 2000+ new local jobs – set to become one of the largest automated advanced manufacturing facilities outside of China. The factory will be equipped with state-of-the-art multi-axis CNC systems, a software first approach, cleanroom capabilities, etc. designed to serve global aerospace, defence, medical, semi-con and consumer electronics OEMs at scale.
Vesper: Ethereal continues to invest in its proprietary factory operating software stack that uses AI to predict manufacturing lead times, track factory uptime and output in real time and optimise production workflows. This shift from experience-driven to data-driven manufacturing allows Ethereal to operate at the speed and reliability that customers demand – without compromising on micron-level accuracy.
India’s First Domestic CNC Controller: The funds will also be used to develop India’s first proprietary multi-axis CNC controller: the command centre that governs every axis of machine movement and delivers the micron-level precision.
Semi-conductors: Ethereal is actively engaged in India’s emerging semiconductor ecosystem, supporting the domestic sourcing of high-precision components critical to chip manufacturing infrastructure which is a space where the company sees a long-term, strategically significant opportunity.
Global Expansion: Building dedicated teams in the United States and Europe to serve global aerospace, defence, and medical device OEMs directly.
Commenting on the fundraise, Kaushik Mudda, Co-Founder & CEO, Ethereal Machines shared, “India has long had the engineering talent to lead in advanced manufacturing; what has been missing is deeply integrated industrial capability at global standards. The world is actively looking for resilient alternatives in global manufacturing, and India has a once-in-a-generation opportunity to emerge as a serious deep-tech manufacturing powerhouse. 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.”
Anirudh Singh, Partner, Avataar Ventures shared, “Ethereal is solving one of the hardest problems in the entire manufacturing stack: building high-precision components at global standards and at scale, out of India. And it sits in front of one of the largest end markets in the world. It takes superhuman strength to do this with minimal outside support in an unforgiving industry, and there is no better team than Kaushik and Navin to pull it off. Their full-stack approach of building their own CNC machines and pairing them with intelligent factory software, lets them operate at 1/6th the cost of global peers. The roster of top-tier global clients they have already won is validation of that technological edge. As global supply chains look for trusted, resilient alternatives, we believe Ethereal can become a category-defining manufacturing platform from India, built for the world.”
Rajan Anandan, Managing Director, Peak XV and Surge shared, “India is at an inflection point in precision manufacturing. As global companies look for more resilient supply chains and demand grows across aerospace, defence, semiconductors and medical devices, India has the opportunity to become a trusted global hub for precision manufacturing. Kaushik, Navin and the Ethereal Machines team are building exactly the kind of full-stack capability this moment requires, from proprietary CNC machines and factory software – Vesper, to scaled production capability. We have partnered with this team since the seed round and are excited to continue deepening that partnership.”
The raise comes at an inflection point for Indian manufacturing. The sector contributes roughly 17% of the country’s GDP, yet India remains heavily dependent on precision machine tools imported from Germany and Japan. The global “China+1” supply chain diversification trend, combined with surging demand across aerospace and defence, has created an unprecedented window for Indian manufacturers to capture a meaningful share of the $220 billion global precision manufacturing market, which is expected to grow to $400 billion by 2030. With its proprietary machines, Machining-as-a-Service model, and growing roster of global clients, Ethereal Machines is positioned to help establish India as a tier-one destination for precision engineering.
