Japan's Sakana AI raises $135 mn fund at $2.5 bn valuation, but without newly raised capital

Tokyo-based Sakana AI has secured ¥20 billion (roughly $135 million) in a Series B round, lifting its valuation to $2.65 billion from a pre-money figure of $2.5 billion, CEO David Ha told TechCrunch. The two-year-old firm is carving out space among a new generation of AI companies, including Mistral AI, DeepSeek and AI21 Labs, that are developing specialised or region-focused models rather than directly challenging the major US players.

Focus on Japan-centred model development

Founded in 2023 by former Google researchers Llion Jones, Ren Ito, and Ha, Sakana AI builds affordable generative AI models designed to work effectively with small datasets and optimized for Japanese language and culture. The new funding attracted a mix of new and returning investors, combining major Japanese institutions like Mitsubishi UFJ Financial Group (MUFG) with global venture firms including Khosla Ventures, Macquarie Capital, NEA, Lux Capital, and In-Q-Tel (IQT).

Ha said the capital will support R&D, model development, and expansion of engineering, sales, and distribution teams in Japan. This year, the company has broadened its local footprint by partnering with leading Japanese enterprises such as Daiwa and MUFG to develop AI solutions.

Expanding sector reach and long-term strategy

Ha, who previously led research at Stability AI and held roles at Google and Goldman Sachs, said Sakana plans to grow its enterprise business beyond finance into industrial, manufacturing, and government sectors in 2026. The company is also looking ahead to opportunities in defence, intelligence, and manufacturing and intends to “actively pursue strategic investment, partnerships, and M&A for long-term global growth.”

Sakana says demand is increasing globally for sovereign AI systems that reflect national cultures and values. The startup noted that its approach of concentrating R&D on products built after LLM training allows it to deliver advanced models tailored to Japan without joining the large-scale model race.

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This Series B follows its Series A round roughly a year earlier, when Sakana raised about ¥30 billion ($214 million) at a $1.5 billion valuation. According to PitchBook, the company had secured approximately $244 million in total as of March 2025, with this latest round bringing its total funding to about $379 million.