Japan is pouring billions of dollars into its commercial space industry while easing restrictions on defense exports, helping domestic aerospace startups reach global markets. Sapporo-based propulsion startup Letara is capitalizing on this momentum by expanding beyond satellite thrusters to build large rocket systems for space, defense, and security applications, according to co-CEO Shota Hirai.
The expansion is backed by 2.6 billion yen, or roughly $16 million, in fresh funding aimed at turning years of university research into a commercial business. Headline Asia, JIC Venture Growth Investments, and Incubate Fund co-led the financing round. Additional participants include strategic investors such as NES (Networked Energy Services) Corporation, energy firm Toyoda Gosei, and Frontier Innovations, an investment fund managed by Frontier Innovations and backed by the Japan Aerospace Exploration Agency (JAXA).
Hirai noted that the new capital allows the company to move beyond in-space thruster demonstrations. Letara plans to explore broader space and defense applications, proposing custom hybrid rocket systems tailored to specific client needs.
At the center of Letara’s approach is a hybrid rocket design that keeps solid fuel separate from the liquid oxidizer needed for combustion. Instead of relying on expensive paraffin wax, the company uses inexpensive, widely available materials like plastic and rubber as solid fuel. Letara developed a proprietary manufacturing process that mixes, shapes, and compresses these materials to ensure reliable ignition and consistent burns, producing higher thrust with less waste.
This approach tackles three historical challenges in hybrid propulsion: generating sufficient thrust, maintaining consistent performance, and controlling combustion. Market opportunities are expanding quickly, with the global hybrid rocket market projected to reach $2.4 billion by 2032, up from $858 million in 2024.
Letara faces competition from other hybrid propulsion developers globally, including Japan’s Interstellar Technologies, China’s Galactic Energy, South Korea’s Innospace, Singapore’s Equatorial Space, Germany’s HyImpulse, Australia’s Gilmour Space, and several U.S. firms.
The core ideas behind Letara originated at Hokkaido University, where co-CEOs Landon Kamps and Hirai researched rocket propulsion. They recognized that the safety and simplicity of hybrid rockets could serve private space companies as commercial activity expanded. When Letara spun out of the university in 2020, the team initially focused on developing small satellite thrusters.
As satellite and defense markets grew, Letara expanded its scope. Large spacecraft moving from low Earth orbit to geostationary orbit require high-thrust propulsion to navigate harsh radiation belts, driving strong demand for launch systems. Letara targets satellite manufacturers, launch providers, and defense agencies, securing initial orders from satellite companies and the Japanese government.
The company’s next major milestone is an in-orbit firing test with an international partner, which is a key step toward full commercialization. Letara is also establishing a repeatable manufacturing process, complete with quality controls and a reliable supply chain for fuel and tanks to support volume production. Additionally, the team is exploring the possibility of using recycled plastic as rocket fuel in future iterations.