Ethereal Machines raises $28.5 mn in Series B round led by Avataar Ventures

The Bengaluru-based deep-tech startup will use the capital to expand precision manufacturing capacity, build a mega factory and strengthen its presence in global aerospace and defence markets

Deep-tech startup Ethereal Machines on Thursday said it has raised $28.5 million in a Series B funding round led by Avataar Ventures, with participation from Peak XV Partners and other investors.

 

The company said the capital will be deployed to advance the country's self-reliance in advanced precision manufacturing and equip domestic and international aerospace, defence and healthcare industries with high-tolerance components.

 

The funds will be used across five key priorities, including constructing a mega factory and building dedicated teams in the United States and Europe to serve global aerospace, defence and medical-device manufacturers directly.

 

Since the company's $13 million Series A funding round in June 2024, Ethereal said it has grown its Machining-as-a-Service (MaaS) revenue threefold year-on-year and scaled production capacity tenfold.

 

 

The company currently operates a fully automated smart manufacturing unit in Peenya, Bengaluru. It has also signed a memorandum of understanding (MoU) with the Government of Karnataka to establish a 300,000-square-foot mega factory on the outskirts of the city.

 

Commenting on the fundraise, Kaushik Mudda, co-founder and chief executive officer (CEO) of Ethereal Machines, said: “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.”

 

The fundraise comes at an inflection point for Indian manufacturing. The sector contributes roughly 17 per cent of the country's gross domestic product (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 rising demand across aerospace and defence, has created an opportunity for Indian manufacturers to capture a meaningful share of the $220 billion global precision manufacturing market, which is projected to grow to $400 billion by 2030.