Letara, a Sapporo-based startup, is pivoting from satellite thrusters to large rocket systems by developing hybrid propulsion engines made from affordable, widely available materials. The company just raised ¥2.6 billion, approximately $16 million, in new funding to commercialize technology that could reshape how rockets are built and launched globally.

What Makes Letara's Rocket Technology Different?

At the core of Letara's approach is a hybrid rocket design that keeps solid fuel separate from liquid oxidizer, a fundamental difference from traditional rocket engines. The company uses inexpensive materials such as plastic and rubber as solid fuel, combined with a proprietary manufacturing process that mixes, shapes, and compresses these materials to ensure reliable ignition and consistent burning.

The result is a system that delivers more thrust with less waste than conventional hybrid rockets that typically rely on expensive paraffin wax. Letara's co-CEO Shota Hirai explained the company's core mission: "With this round, we will go beyond demonstrating that thruster in space. 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".

Shota Hirai

"With this round, we will go beyond demonstrating that thruster in space. 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," said Shota Hirai, co-CEO of Letara.

Shota Hirai, Co-CEO at Letara

Why Is the Global Market Paying Attention?

The timing of Letara's expansion reflects explosive growth in the hybrid rocket propulsion market. The global hybrid rocket propulsion market is projected to expand to $2.6 billion by 2032, up from $848 million in 2024, representing a compound annual growth rate of 15 percent. This trajectory points to growing demand for the technology as both commercial and government entities seek new launch capabilities.

Japan itself is fueling this momentum. The country is pouring billions of dollars into its burgeoning space industry and easing restrictions on defense exports, efforts designed to build a homegrown aerospace sector filled with domestic startups that have global reach. Letara is well-positioned to capitalize on this push, having already won orders from rocket and satellite companies as well as the Japanese government, though the company did not disclose the value of those contracts.

How Is Letara Solving Long-Standing Rocket Engine Problems?

Hybrid rocket technology has faced three persistent challenges that have limited its widespread adoption. Letara's approach aims to address all three:

• Generating Sufficient Thrust: Traditional hybrid rockets struggle to produce the power needed for larger payloads and longer missions, but Letara's manufacturing process and material selection are designed to overcome this limitation.
• Maintaining Performance: Consistency across multiple firings is critical for commercial operations, and Letara's proprietary compression and shaping techniques help ensure reliable performance across repeated launches.
• Controlling Combustion: Unpredictable burning patterns can compromise mission success, but Letara's material formulation and ignition system provide better control over the combustion process.

The company faces competition from several international players developing hybrid rocket technology, including Japan's Interstellar Technologies, China's Galactic Energy, South Korea's InnoSpace, Singapore's Equatorial Space, German startup HyImpulse, and Australian Gilmour Space. Despite this crowded field, Letara's academic roots and focus on solving fundamental engineering problems give it a distinct advantage.

What Are Letara's Next Steps Toward Commercial Launch?

Letara emerged from research conducted by co-CEOs Landon Thomas Kamps and Shota Hirai at Hokkaido University. When the company was spun out in 2020, it focused narrowly on satellite thrusters. Since then, the global propulsion market has become more crowded as demand for launch and defense capabilities has grown, prompting Letara to pursue opportunities in defense contracts and launch services.

The company's next major milestone is an in-orbit firing test with an overseas partner, which Letara views as a critical step toward full commercialization. Beyond that, the startup will 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.

Letara's funding round was co-led by Headline Asia, JIC Venture Growth Investment, and Incubate Fund, with participation from strategic investors including NES Corporation, an 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 the Japan Aerospace Exploration Agency. This diverse investor base signals confidence in both the technology and Japan's broader space ambitions.

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. If successful, such an approach could further reduce costs and environmental impact, making rocket launches even more accessible to a broader range of organizations.

Letara