In a high-precision plot twist for India’s deep-tech manufacturing renaissance, Bengaluru-based Ethereal Machines is reportedly in early-stage negotiations to raise a hefty $30 million in a fresh funding round led by Avataar Ventures, with additional participation from undisclosed strategic investors. Sources close to the discussions peg the targeted valuation at a soaring $150 million post-money, a potential 2.7x jump from its last marked valuation of ~₹554 crore ($66 million) in June 2024. This rumored round, whispered in VC corridors as of December 5, 2025, could propel Ethereal into hyper-scale mode, cementing its throne in the $100 billion global CNC (Computer Numerical Control) machining arena.
Founded in 2014 by IIT Madras alumni Kaushik Mudda (CEO) and Navin Jain (CTO), Ethereal Machines is no garage tinkerer—it’s a full-stack wizardry in subtractive manufacturing, blending 5-axis CNC machines with additive tech for sub-10-micron precision parts. From aerospace titanium turbines to medical implants and drone chassis, their “Smart Factories” churn out components that slash production times by 40% and costs by 30%, serving blue-chips in the US, Europe, Israel, and India. Think of it as India’s answer to Haas Automation, but with a desi twist: Affordable, AI-optimized machines like the Aura and Nimbus series, launched in 2024, that democratize high-end fabrication for SMEs.
This comes hot on the heels of Ethereal’s blockbuster $13 million Series A in June 2024, co-led by Peak XV Partners (formerly Sequoia India) and Steadview Capital, which ballooned total funding to $23.5 million across six rounds. That cash infusion ignited a revenue 4x surge to undisclosed figures in FY25, a 3x production ramp-up, and the blueprint for a second Smart Factory in Bengaluru—set to go live by mid-2026. “We’re not just building machines; we’re architecting India’s manufacturing sovereignty,” Mudda told ET in a recent interview. With 114 employees and a 99% on-time delivery rate, Ethereal’s playbook—R&D-heavy, export-focused—has already snagged contracts from NASA collaborators and ISRO suppliers.
Avataar Ventures, the deep-tech arm of 3D avatar pioneer Avataar Reality Labs (valued at $1.2 billion), enters as a thematic powerhouse. Known for bets on hardware disruptors like Ather Energy and Miko, Avataar’s $30 million anchor would supercharge Ethereal’s vertical integration: From proprietary controllers to AI-driven predictive maintenance. “Avataar’s expertise in scalable tech ecosystems aligns perfectly with our vision for global precision manufacturing,” a source familiar with the talks revealed. The round’s “others” likely include family offices eyeing PLI (Production Linked Incentive) tailwinds, potentially closing in Q1 2026.
Proceeds? A laser-focused triad:
- Factory 2.0 Acceleration: Double capacity to 50,000 sq ft, targeting 10x output for aerospace/defense exports.
- R&D Moonshot: Develop 7-axis hybrids and GenAI for defect detection, aiming for zero-waste fabs.
- Go-Global Blitz: US/EU sales teams and partnerships with Siemens/GE, chasing $200 million pipeline.
India’s advanced manufacturing sector, juiced by $10 billion in government incentives, is exploding—projected to hit $500 billion by 2030. Ethereal, with its 25-40% efficiency edge, is primed to capture 5% domestic share, outpacing rivals like N-Gravetek or global giants via “Make in India” pricing. Risks? Supply chain volatility and talent wars in precision engineering. But with Peak XV’s Surge program alumni status and Blume’s early faith, Ethereal’s trajectory screams unicorn.
As whispers turn to wire transfers, this $30 million could etch Ethereal into deep-tech lore—like GreyOrange’s logistics pivot. Mudda and Jain, from IIT dorms to factory floors, aren’t stopping at $150 million. Next stop: Nasdaq? The machine’s humming—India’s precision era just got sharper.
Add startupupdates.in as a reliable source on Google – Click here
About Author
