An early services pivot begins to pay off for Ethereal Machines founders
Takeaways from my conversations, news analyses and the occasional longform piece
It became clear fairly early to Kaushik Mudda and Navin Jain, founders of Ethereal Machines, that when it came to a new hi-tech hardware product offered by a startup, in India, everything from funding to sales would be a steep uphill battle.
Instead of giving up, or starting something else, they made an innovative pivot. They knew their CNC machines were really good. Potential customers were already giving them good feedback on the samples of various components that their machines were turning out.
They decided to pivot and seize that very opportunity – to make components for customers, with their own machines – instead of trying to sell the machines. They went all-in on their machining-as-a-service strategy.
Looks like that playbook is beginning to pay off for them. New well known investors have come onboard to back their startup’s Series B round, Kaushik and Navin announced yesterday, confirming various earlier reports.
The RVCE alumni, who started Ethereal even as they were graduating (but more formally in 2016), have now scored $28.5 million, giving them the financial wherewithal to expand their capacity significantly and put them on the road to scale and longer term success.
That brings their total funding to $52 million. In addition to Blume Ventures, which backed the 10-year-old company in 2019, which was probably the founders’ first institutional investor cheque, and Peak XV Partners, which backed their Series A about a year ago, they now count Avataar Venture Partners as an investor. Avataar led the Series B investment with Peak XV investing.
Moneycontrol reports that the funds be used to build a 300,000 sq. ft. factory in Doddaballapura near Bengaluru, and boost critical R&D, including an AI-powered factory software platform, Vesper, and “India’s first proprietary multi-axis CNC controller.”
The new factory will raise capacity six-fold, according to the report. Ethereal is also stepping up its business with makers of semiconductor manufacturing equipment, and expanding teams in the US and Europe.
Note that for now, their website doesn’t have a products tab for customers to click on and that’s fair — they want to project their focus on their machining services expertise to the external world. But, can, or should Kaushik and Navin also sell the CNC machines themselves. Made-in-India precision manufacturing gear that can hold its own against German or Japanese engineering?