Letara Raises $16M to Expand Hybrid Rocket Tech Beyond Satellite Thrusters

Letara, a Sapporo-based startup developing hybrid propulsion systems for spacecraft, plans to move beyond small satellite thrusters into larger rocket systems. The company is targeting broader use cases across space, defense and security markets after raising ¥2.6 billion, or about $16 million. The shift comes as Japan invests in its space industry and eases restrictions on defense exports.

The funding round was co-led by Headline Asia, JIC Venture Growth Investment and Incubate Fund. Strategic investors included NES Corporation, Toyoda Gosei and Frontier Innovations, an investment fund backed by JAXA. The capital is intended to help Letara turn academic research and demonstrations into a commercial business.

Letara’s technology uses 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, supported by a proprietary process designed to improve ignition and burn consistency. Letara says the goal is to address persistent hybrid propulsion challenges: thrust, performance and combustion control.

The article cites projections that the global hybrid rocket propulsion market could grow from $848 million in 2024 to $2.6 billion by 2032, with a 15% CAGR. Letara faces competition from companies including Interstellar Technologies, Galactic Energy, InnoSpace, Equatorial Space, HyImpulse and Gilmour Space, along with U.S. propulsion and launch companies. Its target customers include satellite makers and operators, launch companies and governments.

Letara’s next major milestone is an in-orbit firing test with an overseas partner, a step the company views as important for commercialization. It also needs repeatable manufacturing, quality controls and a reliable supply chain for fuel and tanks to support production at scale. The company says recycled plastic could be possible as fuel in the future, but more testing and development would be required.