Japan is investing heavily in its growing space industry while easing restrictions on defense exports, efforts aimed at developing a stronger domestic aerospace sector made up of startups capable of competing globally.
Letara, a Sapporo-based startup developing hybrid propulsion systems for spacecraft, is looking to take advantage of that momentum. After initially concentrating on hybrid thrusters for small satellites, the company now plans to expand into larger rocket systems for space, defense, and security applications, co-CEO Shota Hirai said.
The expansion is being supported by ¥2.6 billion, or roughly $16 million, in new funding. The investment comes as Letara works to turn years of academic research and technology demonstrations into a commercial business.
The funding round was co-led by Headline Asia, JIC Venture Growth Investments and Incubate Fund. Strategic investors participating in the round include NES (Networked Energy Services) Corporation, energy company; Toyoda Gosei, a Toyota Group supplier of rubber and plastic automotive components; and Frontier Innovations, an investment fund managed by Frontier Innovations and backed by Japan Aerospace Exploration Agency (JAXA).
“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 center of Letara’s technology is a hybrid rocket design that keeps solid fuel separate from the liquid oxidizer required for combustion. The company uses inexpensive, widely available materials such as plastic and rubber as solid fuel and has developed a proprietary manufacturing process to mix, shape, and compress those materials so they ignite reliably and burn consistently.
The approach is intended to produce more thrust with less waste than traditional hybrid rockets that frequently rely on more expensive paraffin wax.
According to Hirai, Letara is attempting to address three major challenges that have limited the wider adoption of hybrid propulsion: generating enough thrust, maintaining consistent performance, and controlling combustion.
If successful, the company could benefit from a growing market. The global hybrid rocket propulsion market is projected to reach $2.6 billion by 2032, up from $848 million in 2024, representing a compound annual growth rate of 15%.
Letara is not the only company pursuing the technology. Japan’s Interstellar Technologies, China’s Galactic Energy, South Korea’s InnoSpace, and Singapore’s Equatorial Space are all working on hybrid rocket systems. Germany’s HyImpulse and Australia’s Gilmour Space are also developing hybrid propulsion technologies, while several US companies are pursuing competing propulsion and launch systems.
Academic roots
Letara’s origins date back to rocket propulsion research conducted by co-CEOs Landon Thomas Kamps and Shota Hirai at Hokkaido University. The pair believed that the relative simplicity and safety of hybrid rockets could make the technology useful beyond traditional space programs, particularly as private companies increasingly enter the industry.
When Letara was spun out of Hokkaido University in 2020, its primary focus was developing propulsion systems for satellites.
Since then, the propulsion market has become increasingly competitive as demand for launch and defense capabilities has expanded. Letara is now pursuing defense contracts and launch-service opportunities as it seeks to compete with companies both in Japan and internationally.
“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.”
Letara is targeting satellite manufacturers and operators, launch companies, and governments. The company sees commercial satellites as its largest potential market for in-space propulsion, while government demand for rocket systems is also increasing, particularly in Japan.
The startup says it has already secured orders from rocket and satellite companies as well as the Japanese government, although it did not disclose the value of those contracts.
The company’s next major milestone is an in-orbit firing test with an overseas partner, which Letara considers an important step toward commercializing its technology. It will also need to develop a repeatable manufacturing process, establish rigorous quality controls, and build a dependable supply chain for fuel and tanks capable of supporting production at scale.
Letara also believes recycled plastic could eventually be used as fuel in its hybrid propulsion systems. The company described this as “very much a possibility,” although additional testing and development would be required before such an approach could become practical.
