Ethereal Machines Secures $28.5M Series B to Scale CNC Manufacturing Tech

Kaushik Mudda (CEO) and Navin Jain (CTO)

Ethereal Machines is raising $28.5M in a Series B round led by Avataar Venture Partners, reaching a $158M valuation or a 3.8x jump since 2024. The Bengaluru-based deeptech startup builds precision CNC systems, signaling strong investor confidence in India’s advanced manufacturing sector despite ongoing revenue losses.

What Is Driving Ethereal Machines’ $28.5M Series B Funding Round?

Deeptech manufacturing startup Ethereal Machines is raising Rs 264.5 crore ($28.5 million) in its Series B round, led by Avataar Venture Partners. The round includes participation from Peak XV Partners and Novellus Systems.

This comes nearly two years after its $13 million Series A in June 2024, marking a 119% increase in capital raised between rounds.

The funding reflects broader momentum in advanced manufacturing, a sector projected to exceed $3.2 trillion globally by 2030, according to industry estimates.

How Is the Series B Round Structured?

The company’s board approved the issuance of 29,214 Series B preference shares at Rs 90,536 each, as per filings with the Registrar of Companies (RoC).

Funding Breakdown

Investor	Investment (INR)	Investment (USD)	Stake Post-Round
Avataar Venture Partners	Rs 199.55 crore	$21.5M	13.69%
Peak XV Partners	Rs 30.7 crore	$3.3M	16.36%
Novellus Systems	Rs 27.9 crore	$3.0M	1.92%
Others (Sustained Innovations, Eventures, etc.)	~Rs 6.35 crore	~$0.7M	Minor stakes

Additional participants include Sustained Innovations LLP, Eventures India Pvt Ltd, Shailesh Lakhani, and Indigo Circle Advisors.

Why Does Ethereal Machines’ Valuation Jump Matter?

The Series B round values the company at Rs 1,470 crore ($158 million)—a 3.8x increase from its Rs 383 crore valuation in 2024.

This sharp increase signals:

• Strong investor confidence in precision manufacturing automation
• Rising demand for cost-efficient CNC solutions
• Alignment with global Industry 4.0 trends

For context, similar deeptech ecosystems in regions like ADGM and Hub71 have seen manufacturing-tech investments grow by over 40% YoY since 2022, indicating global alignment.

What Does Ethereal Machines Actually Build?

Founded by Kaushik Mudda and Navin Jain, the company develops proprietary multi-axis CNC machines.

Key Capabilities

• High-precision engineering components
• Faster production cycles (up to 30–50% efficiency gains vs traditional systems)
• Lower manufacturing costs (estimated 20–25% reduction)
• Scalable for aerospace, automotive, and defense sectors

This positions Ethereal within the global shift toward digitized manufacturing, similar to initiatives seen in NEOM, where advanced industrial automation is a core pillar.

How Financially Strong Is Ethereal Machines Today?

Despite rapid valuation growth, the company is still in an investment-heavy phase.

• FY2025 Revenue: Rs 11.45 crore (~$1.4M)
• FY2025 Loss: Rs 27.27 crore (~$3.3M)
• Loss-to-revenue ratio: ~2.38x

This reflects a common deeptech pattern where:

• High R&D costs precede scale
• Profitability typically emerges post-Series C
• Capital is deployed toward product refinement and market expansion

What Does This Mean for India’s Deeptech Manufacturing Ecosystem?

Ethereal Machines’ Series B round highlights three macro trends:

• Capital concentration in deeptech: VC funding into Indian deeptech crossed $850M in 2025, up 60% YoY
• Shift toward hardware + software integration
• Global competitiveness in precision engineering

Investors like Avataar are increasingly backing B2B tech-led manufacturing, aligning India with global innovation hubs.

 

 

FAQ

1. What is Ethereal Machines known for?
Ethereal Machines builds proprietary multi-axis CNC machines that enable faster, cost-efficient production of precision engineering components.

2. How much funding is Ethereal Machines raising in Series B?
The company is raising Rs 264.5 crore ($28.5 million) in its Series B round.

3. What is the valuation of Ethereal Machines after Series B?
The company is valued at Rs 1,470 crore ($158 million), marking a 3.8x increase from its previous round in 2024.

4. Who are the key investors in this round?
The round is led by Avataar Venture Partners, with participation from Peak XV Partners, Novellus Systems, and other investors.

5. Is Ethereal Machines profitable?
No, the company reported a loss of Rs 27.27 crore in FY2025 against revenue of Rs 11.45 crore, reflecting ongoing investment in growth and R&D.