Sakana AI Reaches $2.65 Billion Valuation, Becomes Japan's Most Valuable Private Startup After $135M Series B

Tokyo-based Sakana AI has secured $135 million in a Series B funding round, propelling its valuation to $2.65 billion and establishing it as Japan's most valuable unlisted startup. The significant investment was highlighted by Josh Wolfe of Lux Capital, an early investor, who remarked on social media, ">🇺🇸🇯🇵 a great headline as I start the day in Tokyo, Japan Lux family co @SakanaAILabs 📈."

This latest funding round brings Sakana AI's total capital raised to approximately $379 million across its seed, Series A, and Series B rounds. Key investors in the Series B round included MUFG, Khosla Ventures, In-Q-Tel, Macquarie Capital, and returning investor Lux Capital, among others. The substantial capital infusion underscores strong investor confidence in the company's innovative approach to artificial intelligence.

Founded in late 2023 by former Google researchers David Ha, Llion Jones, and Ren Ito, Sakana AI distinguishes itself by developing affordable generative AI models optimized for Japanese language and culture. The company, whose name "Sakana" means "fish" in Japanese, employs a nature-inspired philosophy, focusing on evolutionary model merging rather than solely relying on massive compute resources. This approach aims to create "sovereign AI" solutions tailored to specific national needs and values.

The newly acquired funds are earmarked for accelerating research and development, expanding its workforce, and fostering global growth. Sakana AI plans to extend its enterprise solutions beyond finance into industrial manufacturing, government services, and defense sectors by 2026. This strategic expansion aligns with Japan's broader national agenda to leverage AI to address demographic challenges and enhance technological competitiveness.

Sakana AI's rapid ascent to a $2.65 billion valuation in just over two years signifies a pivotal moment for Japan's startup ecosystem. Its unique methodology, which prioritizes sustainable AI development and localized solutions, positions it as a significant player challenging the compute-intensive strategies of larger global AI giants. The company's success reflects a growing demand for AI systems that are both efficient and culturally attuned.