UTAITE raises JPY 7.7 billion for 2.5D entertainment expansion

Tokyo, Japan—UTAITE Inc. said on Tuesday that it has secured JPY 7.7 billion (US$55 million) in Series B funding led by Tencent, bringing its total funding to JPY 12.6 billion (US$90 million).

The funding round, completed through third-party allocation of shares and bank loans, attracted 11 new investors, including Tencent, Development Bank of Japan, and SEGA SAMMY HOLDINGS, alongside 12 existing investors such as Sony Innovation Fund and Dentsu Ventures.

UTAITE develops and operates "2.5D IP" content—a hybrid entertainment format in which performers connect with fans as digital avatars online while appearing physically at live events.

The Tokyo-based company, established in December 2022, said it will use the funds to secure talent, strengthen its organizational framework, and accelerate international market development.

"Together, we will strive to expand Japan's iconic cultural phenomenon, '2.5D IP,' and united as a team, we aim to take on the global market by establishing a new Japanese entertainment economy," said Masashi Kurata, CEO of UTAITE.

The company describes 2.5D performers, known as "Utaite" (meaning "singer" in Japanese), as dominating entertainment rankings among Japanese teenagers. 

These performers combine the appeal of anime-style virtual characters with real-life artist performances.

Mao Zitong, UTAITE's CFO, said the funding round "has established a solid financial foundation to accelerate our growth strategy and global expansion further."

Shujitsu Kaku, Tencent's Investment Director, cited UTAITE's "innovative 2.5D IP product and very experienced management team" as reasons for investing.

Kazuhiro Ikeda, Vice President at Development Bank of Japan, noted the growing global attention to Japanese content, stating that "the export value of the content industry now rivals that of traditional key sectors such as steel and semiconductors."

The funding round also included participation from SBVA (formerly SoftBank Ventures Asia), Japan Post Investment Corporation, Japan Post Insurance NEXT Partners, SMBC Nikko Securities, TBS Innovation Partners, Shizuoka Capital, Shochiku Ventures, and Yostar.