Ethereal Machines raises USD 28.5 million in Series B led by Avataar for AM expansion

Bengaluru-based Ethereal Machines has secured INR 264.5 crore (approximately USD 28.5 million) in a Series B funding round led by Avataar Venture Partners, with participation from Peak XV Partners, Novellus Systems, Sustained Innovations LLP, Eventures India Pvt Ltd, and other investors. The round, approved by the board via issuance of 29,214 Series B preference shares at INR 90,536 each, comes nearly two years after its USD 13 million Series A in June 2024. Avataar contributed INR 199.55 crore (USD 21.5 million) for a 13.69% stake, while Peak XV increased its holding to 16.36% and Novellus Systems took 1.92%. Co-founders Kaushik Mudda and Navin Jain retain a combined 24.17% stake in the company, which produces proprietary multi-axis CNC machines and offers Machining-as-a-Service for high-precision components targeting aerospace, healthcare, and consumer electronics.

This funding is significant not for Ethereal's additive manufacturing hardware — the company does not sell 3D printers — but for its position as a hybrid precision manufacturing service provider that competes with and complements AM workflows. Ethereal's multi-axis CNC platform and on-demand service model directly address the same high-mix, low-volume, high-tolerance production gap that metal AM (particularly LPBF and DED) targets in aerospace and medical-dental. The company's ability to deliver cost-effective, scalable precision components without the qualification burden of AM positions it as a substitute threat in segments where AM has struggled to displace conventional subtractive methods. The participation of Novellus Systems, a semiconductor capital equipment maker, hints at potential demand from advanced electronics and MEMS manufacturing, where hybrid additive-subtractive approaches are gaining traction. The round also reflects growing investor confidence in India's deep-tech manufacturing ecosystem, which has historically been underrepresented in global AM capital flows.

From an AM industry perspective, Ethereal Machines is not a direct peer to LPBF or binder jetting system vendors, but its success underscores a persistent reality: for many precision applications, subtractive machining remains faster to qualify and cheaper per part than metal AM. The company's Machining-as-a-Service model competes directly with AM service bureaus for aerospace and medical prototype-to-production work. The practical implication is that Ethereal's growth will likely come at the expense of AM adoption in price-sensitive, high-tolerance segments unless metal AM vendors can demonstrate equivalent surface finish and geometric accuracy at comparable lead times and cost. The company's next step is to convert its Series B capital into expanded machine capacity and customer references in aerospace and semiconductor tooling, where qualification cycles are long but contracts are sticky.