Japanese Space Tech Startup Letara Expands Beyond Satellite Thrusters with $16M Funding

Japan’s burgeoning space industry is experiencing a significant push, with billions of dollars being poured into the sector and defense export restrictions being eased. This growth is creating a thriving ecosystem for domestic startups with global reach, including Sapporo-based Letara.

Letara, a startup developing hybrid propulsion systems for spacecraft, is capitalizing on this momentum. After focusing on hybrid thrusters for small satellites, the company is now planning to develop large rocket systems for the space, defense, and security markets, as revealed by co-CEO Shota Hirai in an interview with TechCrunch.

The expansion is being fueled by ¥2.6 billion (~$16 million) in new funding, which comes as the startup attempts 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 Corporation, Toyoda Gosei, and Frontier Innovations.

"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. Letara aims to solve three problems that have so far limited the use of hybrid propulsion: generating sufficient thrust, maintaining performance, and controlling combustion, Hirai explained.

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.

However, Letara is not 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. 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. They believed the relative safety and simplicity of hybrid rockets could make the technology useful beyond traditional space programs, particularly as private companies expand into the industry.

The company’s ambitions have grown along with the market. When Letara was spun out of Hokkaido University in 2020, it was focused on developing satellite thrusters. Since then, the global propulsion market has become more crowded as demand for launch and defense capabilities has grown. Letara is now pursuing opportunities in defense contracts and launch services, in an effort to position itself to compete not just with other Japanese startups, but with companies around the world.

"Large spacecraft need high thrust propulsion as well, especially when they need to go from LEO (low earth orbit) to GEO (geostationary orbit) and get through the high radiation Van Allen belt quickly," said Hirai. "And of course, there is insane growing demand for launch vehicles."

Letara is targeting satellite makers and operators, launch companies, and governments. It sees commercial satellites as its biggest market for in-space propulsion, while government demand for rocket systems is growing, particularly in Japan. The company says it has already won orders from rocket and satellite companies as well as the Japanese government, although it did not disclose the value of those contracts.

Its next major milestone is an in-orbit firing test with an overseas partner, which Letara sees as a key step toward commercialization. It will also need to establish a repeatable manufacturing process, backed by quality controls, and a reliable supply chain for fuel and tanks that can support production at scale.

When asked whether recycled plastic could eventually be used as fuel, Letara said it was "very much a possibility" with its hybrid technology, though more testing and development would be needed.

Key Statistics:

• The global hybrid rocket propulsion market is projected to expand to $2.6 billion by 2032.
• The market is expected to grow at a CAGR of 15%.
• Letara has received ¥2.6 billion (~$16 million) in new funding.