Japan's AI upstart Sakana AI secures $135 million in funding, soaring valuation opens a new journey of two-front strategy

On November 17, Japanese AI unicornsSakana AIAnnounced the completion of $135 million (roughly Rs. 960 million) Series Bfinancing, valued at $2.635 billion (roughly Rs. 18.73 billion), with total financing reaching about $347 million (roughly Rs. 2.47 billion), an increase of about 76% compared to the valuation of $1.5 billion (roughly Rs. 10.67 billion) a year ago.

Sakana AI is committed to developing generative AI models that can run efficiently on small-scale datasets, optimizing the models for Japanese language and culture, and landing customized applications for industry needs.

The round attracted original investors such as Mitsubishi UFJ Financial Group and Khosla Ventures, as well as new investors such as U.S. venture capital firm Factorial Funds, Australian investment bank Macquarie Capital, and Spanish financial group Santander Group. The new funding program will be used to develop AI models and scale up the technology, sales, and distribution teams.

▲Sakana AI official blog (Source: Collab)

Sakana AI was founded in July 2023 by David Ha, Llion Jones, and Ren Ito, a former Google researcher and one of the co-authors of Attention Is All You Need, the paper that proposed the Transformer architecture. Llion Jones is a former Google researcher and co-author of Attention Is All You Need, the paper that proposed the Transformer architecture.

David Ha, co-founder and CEO of Sakana AI, worked at Goldman Sachs, a global financial services organization, and then joined Google Brain as a Senior Scientist, where he led research on Stability AI, a Stable Diffusion image generation model unicorn. In August, David Ha was also featured on TIME's list of the Top 100 AI People of 2025.

Sakana AI co-founder and CTO Leon Jones has worked as a software engineer at Youtube and Google, and during his tenure at Google he launched Attention Is All You Need, a revolutionary paper with seven other authors.

The other co-founder, Lian Ito, is a veteran of Japan's tech and venture capital community, serving as COO of Sakana AI, was CEO of Mercari Europe, the European business of Mercari, Japan's largest second-hand e-commerce platform, and is a senior fellow at New York University School of Law in the United States.

▲Sakana AI co-founders, from left to right, Ren Ito, Llion Jones, and David Ha

With the closing of the new financing, Sakana AI has taken in $347 million (roughly Rs. 2.47 billion).Sakana AI has received two previous rounds of financing: in January 2024, Sakana AI received 4.5 billion yen (roughly Rs. 206 million) in financing, with participation from Lux Capital, Khosla Ventures, Japanese telecom company NTT, and Sony Group; last September, Sakana AI completed a $214 million (roughly Rs. 1.52 billion) Series A round, with NVIDIA participating as a major shareholder, making its founding Lux Capital, Khosla Ventures, Japanese telecom company NTT and Sony Group participated in the investment; in September last year, Sakana AI completed the 214 million U.S. dollars (about 1.52 billion yuan) A round of financing, NVIDIA participated in the investment to become the major shareholders, so that the valuation of its establishment of a year reached about 1.5 billion U.S. dollars (about 10.67 billion yuan), and quickly leapt to a unicorn.

Sakana AI's core business is Japanese-native generative AI, developing AI models that can generate text, code, scientific ideas, and other content optimized for the Japanese language, as well as providing customized and specialized models to solve industry problems.

The company has taken a different technological route than OpenAI, Anthropic, and others, in that it wants to ditch the Transformer architecture in favor of natural evolution-inspired reductions in model computational costs and improvements in model performance, having developed technologies such as AI Scientist, Evolutionary Model Fusion, Continuous Thinking Machines, and the Darwin-Gö del Machine. del Machine.

In March, SakanaAI released three Japanese language models, EvoLLM-JP, EvoVLM-JP, and EvoSDXL-JP, which are a large language model, a visual language model, and an image generation model, and in January, it released Karamaru, an Edo-style chatbot, in addition to the open-sourced ShinkaEvolve framework, which is a more efficient and creative solution than the Transformer architecture. ShinkaEvolve, a framework that can efficiently propose creative solutions compared to the Transformer architecture.

This year, Sakana AI has expanded its presence in Japan, working with local companies including Daiwa Securities and Mitsubishi UFJ Financial Group to develop corresponding AI solutions. Foreign media TechCrunch said Sakana AI has bigger goals, and it intends to enter the defense, intelligence and manufacturing tracks.

Conclusion: Big Model Financing Hot Off the Presses

Similar to French AI startup Mistral AI and Israeli AI startup AI21 Labs, Sakana AI is going to carve out its own niche market with specialized models for specific regions and industries.According to Sakana AI, they are going to take into account the cultural and linguistic characteristics of Japan as well as the specific needs of various industries, and develop basic models for the local Japanese market in a cost-effective and efficient way. Modeling.

Sakana AI won another round of financing, attracting the attention of investors from different regions of the world, such as Japan, the United States, Europe, etc., proving that its differentiated route out of the world has been favored by capital, and capital bets on AI continue to be hot.

Source: TechCrunch