As US giants like Google, OpenAI, and Anthropic race to develop large-scale language models to power their AI products, startups like Sakana AI, Mistral AI, DeepSeek, and AI21 Labs are carving out their own niches with specialized models designed for specific regions, industries, or unique capabilities.
In pursuit of that goal, Tokyo-based Sakana AI has completed a 20 billion yen (approximately $135 million) Series B funding round. This increases the company’s post-money valuation from $2.5 billion to $2.65 billion, CEO David Ha told TechCrunch.
Founded in 2023 by former Google researchers Lion Jones, Ren Ito, and Ha, Sakana AI creates affordable generative AI models that work well on small datasets and are optimized for Japanese language and culture.
The Series B round included a mix of new and returning investors, combining Japanese financial giants like Mitsubishi UFJ Financial Group (MUFG) with global venture firms like Khosla Ventures, Macquarie Capital, NEA, Lux Capital, and In-Q-Tel (IQT).
“We plan to invest new funds in research and development, including (AI) model development, as well as in expanding our engineering, sales and distribution teams in Japan,” Ha said. This year, Sakana expanded its presence in Japan, partnering with leading local companies such as Daiwa and MUFG to develop AI solutions.
Ha, who previously led research at Stability AI and worked at Google and Goldman Sachs, also said Sakana plans to expand its enterprise business beyond finance into industrial, manufacturing and government sectors in 2026.
Looking to the future, the company is eyeing the defense, intelligence and manufacturing sectors. The two-year-old startup also said it is “aggressively pursuing strategic investments, partnerships, and M&A toward long-term global growth.”
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Sakana said he sees strong global demand for sovereign AI solutions that reflect “national cultures and values.” The Japanese startup added that by focusing its R&D efforts on AI products after the LLM training, it will be able to take a different path from the large-scale AI model competition and efficiently build advanced models tailored for Japan.
This funding round comes about a year after the company’s Series A round, which raised about 30 billion yen ($214 million) at a valuation of $1.5 billion. According to PitchBook, Sakana has raised a total of approximately $244 million as of March 2025, and this round brings the total amount to approximately $379 million.
