Synopsis
Deeptech startup Ethereal Machines secured $28.5 million in funding. This capital will fuel the construction of a large manufacturing facility near Bengaluru. The company will also develop India's first indigenous CNC controller. Expansion of its AI-driven software platform is also planned. New teams will be established in the US and Europe.Listen to this article in summarized format
The Bengaluru-based deeptech startup was founded in 2014 by Kaushik Mudda and Navin Jain. It designs and builds proprietary multi-axis CNC machines (automated tools that cut and carve) and operates a Machining-as-a-Service (MaaS) business supplying high-precision components to aerospace, defence, healthcare, and semiconductor clients.
The company's flagship CNC machines, Aura and Nimbus, deliver sub-10-micron accuracy, a standard it claims is a first for Indian manufacturing. It also claims to run on one-sixth the cost of global peers, which Mudda attributes to Ethereal's intellectual property (IP).
The fresh capital will be used to fund a 300,000 square feet mega-factory on the outskirts of Bengaluru, develop India's first domestic CNC controller, and expand its AI-driven factory software platform Vesper. Ethereal will also set up new teams in the US and Europe.
Growth period
The startup raised $13 million in a series A round in June 2024, and since then, the company has tripled its MaaS revenue year over year and scaled production capacity tenfold at its automated smart factory in Bengaluru's Peenya.
Mudda said the growth has come from existing clients increasing their engagement. "Customers have been increasing their wallet share with us; we have moved from handling medium precision to very high precision work."
Certifications from these projects helped Ethereal win bigger clients across new geographies, Mudda told ET. Nearly 70% of the company's revenue now comes from exports, with clients across the US, UK, Europe, and early inroads into southeast Asia and Japan.
Next phase
Ethereal's CNC controller has been in development for nearly five years, Mudda said, adding that very few companies globally have built multi-axis CNC machines and fewer still have cracked the controller. The company said it is now in the final stretch, with cutting trials underway and two machines already running on its proprietary controller.
On the mega-factory, Mudda said the land has been procured and construction is set to begin by the end of the year. "The facility is next to Foxconn in Bengaluru's emerging industrial belt, and will be built out in three phases. The longer-term target is to scale its machine fleet to 250-300 units over the next 18-24 months," the CEO said.
Strengthening India's ecosystem
India's manufacturing sector contributes about 17% of GDP but remains heavily reliant on precision machine tools from Germany and Japan. This is what the company aims to change.
"India consumes roughly $2.2 billion worth of CNC machines annually, of which about $1.2 billion is imported, predominantly the higher-end four-axis and five-axis machines. Domestic manufacturers have largely stuck to two and three-axis machines, ceding the more sophisticated end of the market to foreign suppliers," Mudda said.
The China+1 supply chain push by global companies, such as Apple, has created an opportunity for India, and Ethereal wants to pitch itself as the platform to help the country capture a share of the $220 billion global precision manufacturing market, which is projected to reach $400 billion by 2030, added Mudda.
