Japanese startup Letara raises $16M to expand from satellite thrusters into large rocket systems

Japan has been investing billions of dollars into building a domestic space industry while easing restrictions on defense exports, aiming to grow homegrown aerospace startups with global reach. Letara, a Sapporo-based company developing hybrid propulsion systems, is positioning itself to benefit from that push.

Having focused until now on hybrid thrusters for small satellites, Letara plans to expand into large rocket systems for the space, defense and security markets, co-CEO Shota Hirai told TechCrunch. The move is backed by a new funding round of about ¥2.6 billion, roughly $16 million, co-led by Headline Asia, JIC Venture Growth Investment and Incubate Fund, with participation from strategic investors spanning the energy, automotive parts and IT sectors.

The company's technology relies on a hybrid rocket design that separates solid fuel from the liquid oxidizer needed for combustion. Letara uses inexpensive materials such as plastic and rubber as solid fuel, processed through a proprietary manufacturing method designed to deliver more consistent and efficient combustion than traditional hybrid rockets, which often rely on costly paraffin wax.

The global hybrid rocket propulsion market is projected to grow from $848 million in 2024 to $2.6 billion by 2032. Competition is intensifying, however, with companies in Japan, China, South Korea, Singapore, Germany and Australia all developing similar technology.

Letara was spun out of Hokkaido University in 2020, where its co-founders had been researching rocket propulsion. The company says it has already secured orders from rocket and satellite companies as well as the Japanese government, though it declined to disclose contract values. Its next milestone is an in-orbit firing test with an overseas partner, a key step toward commercialization.