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

While US giants like Google, OpenAI, and Anthropic race to develop the large language models that power their AI products, startups like Sakana AI, Mistral AI, DeepSeek, and AI21 Labs are carving out their own niche with specialized models designed for specific regions, industries, or unique features.

In pursuit of that goal, Tokyo-based Sakana AI has closed a 20 billion yen (about $135 million) Series B funding round, which values ​​the company at $2.65 billion after the money, up from a pre-money valuation of $2.5 billion, CEO David Ha told TechCrunch.

Founded in 2023 by former Google researchers Leon Jones, Rin Ito and Ha, Sakana AI makes affordable generative AI models that work well with small datasets and are optimized for the Japanese language and culture.

The Series B round attracted a mix of new and returning investors, bringing together Japanese financial heavyweights such as Mitsubishi UFJ Financial Group (MUFG) with global players such as Khosla Ventures, Macquarie Capital, NEA, Lux Capital, and In-Q-Tel (IQT).

“We plan to deploy the new capital not only for research and development, including [AI] “Developing the model, but also expanding our workforce for engineering, sales and distribution teams in Japan,” Ha said. This year, Sakana expanded its presence in Japan, collaborating with leading local companies, including Daiwa and MUFG, and developing AI solutions.

Sakana plans to expand its institutional business beyond finance into industrial, manufacturing and government sectors in 2026, said Ha, who previously led research at Stability AI and worked at Google and Goldman Sachs.

Looking to the future, the company is looking to the defence, intelligence and manufacturing sectors. The two-year-old startup also said it “will actively pursue strategic investment, partnerships and mergers and acquisitions for long-term global growth.”

Sakana says it expects strong global demand for sovereign AI solutions that reflect “national cultures and values.” The Japanese startup added that focusing R&D efforts on artificial intelligence products after training LLM holders helps it efficiently build advanced models tailored for Japan, taking a distinct path from the large-scale AI model race.

This funding round comes about a year after the company’s first round, in which it raised about 30 billion yen ($214 million) at a valuation of $1.5 billion. Sakana has raised roughly $244 million in total as of March 2025, according to PitchBook, so this round would bring that total to about $379 million.