Letara raises $16M to expand beyond satellite thrusters

Letara, a Sapporo-based startup developing hybrid propulsion systems for spacecraft, has raised ¥2.6 billion (about $16 million) as it expands from satellite thrusters into large rocket systems for the space, defense, and security markets. 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, an investment fund backed by the Japan Aerospace Exploration Agency (JAXA).

The funding comes as Japan pours money into its space industry and eases restrictions on defense exports, part of a push to build a homegrown aerospace sector with global reach. Letara is looking to capitalize on that push: after years focused on hybrid thrusters for small satellites, the company now plans to develop large rocket systems, co-CEO Shota Hirai told TechCrunch.

At the heart of Letara’s technology is a hybrid rocket design that keeps solid fuel separate from the liquid oxidizer needed for combustion, using inexpensive materials such as plastic and rubber. The company’s proprietary manufacturing process mixes, shapes, and compresses those materials so they ignite reliably and burn consistently, aiming to deliver more thrust with less waste than hybrid rockets that rely on costlier paraffin wax. “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,” Hirai said. “And of course, there is insane growing demand for launch vehicles.”

The global hybrid rocket propulsion market is projected to grow to $2.6 billion by 2032, up from $848 million in 2024 — a 15% compound annual growth rate. Letara isn’t alone in pursuing it: rivals include Japan’s Interstellar Technologies, China’s Galactic Energy, South Korea’s InnoSpace, Singapore’s Equatorial Space, Germany’s HyImpulse, and Australia’s Gilmour Space, alongside several U.S. companies developing competing propulsion and launch systems.

Letara was spun out of Hokkaido University in 2020, where co-CEOs Hirai and Landon Thomas Kamps were researching rocket propulsion, initially focused on satellite thrusters. The company says it has already won orders from rocket and satellite companies as well as the Japanese government, though it did not disclose contract values. Its next major milestone is an in-orbit firing test with an overseas partner, a step toward commercialization, alongside building a repeatable manufacturing process and a reliable fuel and tank supply chain.

Why it matters

Letara’s pivot toward defense and large launch vehicles reflects how Japan’s space and defense sectors are increasingly overlapping, potentially opening new revenue for hybrid-propulsion startups beyond the crowded small-satellite thruster market.