While U.S. giants like Google, OpenAI, and Anthropic race to develop the large language models for their AI products, startups such as Sakana AI, Mistral AI, DeepSeek, and AI21 Labs are carving out their own niche. These companies are creating specialized models designed for specific regions, industries, or unique features.
In pursuit of that goal, Tokyo-based Sakana AI has closed a Series B funding round of 20 billion yen, which is approximately 135 million dollars. This funding values the company at 2.65 billion dollars post-money, an increase from its pre-money valuation of 2.5 billion dollars.
Sakana AI was founded in 2023 by former Google researchers Llion Jones, Ren Ito, and David Ha. The company develops 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. This group combined Japan’s financial heavyweights like Mitsubishi UFJ Financial Group with global venture players such as Khosla Ventures, Macquarie Capital, NEA, Lux Capital, and In-Q-Tel.
The company plans to use the new capital for research and development, including AI model development. The funds will also help expand its workforce for engineering, sales, and distribution teams in Japan. This year, Sakana has expanded its presence in Japan by teaming up with leading local enterprises, including Daiwa and MUFG, and developing new AI solutions.
CEO David 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. The company aims to move into the industrial, manufacturing, and government sectors in 2026. Looking further ahead, the company is eyeing the defense, intelligence, and manufacturing sectors. The two-year-old startup also stated it will be actively pursuing strategic investment, partnerships, and mergers and acquisitions for long-term global growth.
Sakana says it sees strong global demand for sovereign AI solutions that reflect national cultures and values. The Japanese startup added that focusing its research and development efforts on AI products after the large language models are trained helps it efficiently build advanced models tailored to Japan. This strategy takes a path distinct from the large-scale AI model race.
This Series B funding round comes roughly a year after the company’s Series A round, in which it raised about 30 billion yen, or 214 million dollars, at a 1.5 billion dollar valuation. Prior to this round, Sakana had raised roughly 244 million dollars in total as of March 2025. This new round brings the total funding to approximately 379 million dollars.