Sakana AI raises $135M Series B at a $2.65B valuation to continue building AI models for Japan

Sakana AI, a Tokyo-based startup specializing in generative AI, has successfully completed a Series B funding round, raising approximately ¥20 billion (around $135 million). This latest influx of capital elevates the company's valuation to $2.65 billion, a significant increase from its prior valuation of $2.5 billion, as confirmed by CEO David Ha in a discussion with TechCrunch. Founded in 2023 by former Google researchers Llion Jones, Ren Ito, and David Ha, Sakana AI focuses on creating affordable AI models tailored to the Japanese language and culture, particularly effective with small datasets. The recent funding round attracted a mix of both new and existing investors, including notable names from Japan’s financial sector like Mitsubishi UFJ Financial Group (MUFG) as well as international venture capital firms such as Khosla Ventures, Macquarie Capital, NEA, Lux Capital, and In-Q-Tel (IQT). Ha indicated that the newly acquired funds will be allocated not just to research and development for AI model enhancement but also to grow the company's engineering, sales, and distribution teams within Japan. This year, Sakana AI has made significant strides in expanding its operations, collaborating with major local enterprises like Daiwa and MUFG to develop innovative AI solutions. Looking towards the future, Ha disclosed plans to broaden Sakana's enterprise focus beyond the finance sector to include industrial, manufacturing, and governmental applications by 2026. The company is also setting its sights on sectors such as defense and intelligence. As a two-year-old startup, Sakana AI is keen on pursuing strategic investments, partnerships, and potential mergers and acquisitions to sustain long-term global growth. The startup emphasizes the growing global appetite for sovereign AI solutions that resonate with national cultures and values. By concentrating its R&D efforts on developing AI products after large language models (LLMs) are trained, Sakana aims to efficiently craft advanced models that cater specifically to Japan, setting itself apart from the broader AI model race. This funding comes just a year after the company's previous Series A round, in which it raised approximately ¥30 billion ($214 million) at a valuation of $1.5 billion, bringing its total funding to around $379 million as of March 2025, according to PitchBook.