Japanese space tech startup Letara expands beyond satellite thrusters with $16M

Japan is pouring billions of dollars into its burgeoning space industry and easing restrictions on defense exports, efforts designed to build a homegrown aerospace sector filled with domestic startups that have a global reach.

Letara , a Sapporo-based startup developing hybrid propulsion systems for spacecraft, is looking to capitalize on that push. After focusing on hybrid thrusters for small satellites, the company now plans to develop large rocket systems for the space, defense, and security markets, company’s co-CEO Shota Hirai told TechCrunch.

That expansion is being fueled by ¥2.6 billion (~$16 million) in new funding that comes as the startup tries to turn years of academic research and demonstrations into a commercial business. The round was co-led by Headline Asia, JIC Venture Growth Investment and Incubate Fund with participation from strategic investors including NES (Networked Energy Services) Corporation, an energy company; Toyoda Gosei, a Toyota Group supplier of rubber and plastic automotive components; and Frontier Innovations, a Greece-based IT company specializing in data analytics and business intelligence.

“With this round, we will go beyond demonstrating that thruster in space,” Hirai said. “We plan to explore a much wider set of use cases across both the space domain and the defense and security domain, and to develop and propose hybrid rocket systems suited to each of them.”

At the heart of Letara’s technology is a hybrid rocket design that keeps its solid fuel separate from the liquid oxidizer needed for combustion . Inexpensive, widely available materials such as plastic and rubber are used as solid fuel. The company has developed a proprietary manufacturing process that mixes, shapes, and compresses these materials to ensure they ignite reliably and burn consistently. the end result is a system that can deliver more thrust with less waste than traditional hybrid rockets that often use expensive paraffin wax.

The aim is to solve three problems that have so far, limited the use of hybrid propulsion: generating sufficient thrust, maintaining performance and controlling combustion, Hirai said.

There is considerable opportunity if Letara is successful. The global hybrid rocket propulsion market is projected to expand to $2.6 billion by 2032, up from $848 million in 2024, at a CAGR of 15% — a trajectory that points to growing demand for the technology.

Still, Letara isn’t alone in its pursuit. A number of companies are developing hybrid rocket technology, including Japan’s Interstellar Technologies, China’s Galactic Energy, South Korea’s InnoSpace, and Singapore’s Equatorial Space are advancing hybrid rocket technology. German startup HyImpulse and Australian Gilmour Space are also pursuing hybrid rocket technology, while other U.S. companies are developing competing propulsion and launch systems.

The idea for Letara emerged while co-CEOs Landon Thomas Kamps and Hirai were researching rocket propulsion at Hokkaido University.