Letara raises $16 million to scale hybrid rocket technology

Japanese space technology startup Letara has raised ¥2.6 billion, approximately $16 million, to expand its hybrid rocket propulsion systems beyond small satellite thrusters into the broader space, defence, and security markets. The funding round was co-led by Headline Asia, JIC Venture Growth Investment, and Incubate Fund, with participation from strategic investors including NES Corporation, Toyoda Gosei, and Frontier Innovations.

Letara, which was spun out of Hokkaido University in 2020, is looking to capitalise on Japan’s strategy of investing billions of dollars into its space industry and easing restrictions on defence exports. Co-CEO Shota Hirai stated that the company plans to develop large rocket systems for space, defence, and security applications, moving beyond its initial focus on academic research and demonstrations to establish a commercial business.

At the heart of Letara’s technology is a hybrid rocket design that keeps solid fuel separate from the liquid oxidiser needed for combustion. The company utilises inexpensive, widely available materials such as plastic and rubber as solid fuel, employing a proprietary manufacturing process to mix, shape, and compress these materials. This approach aims to deliver more thrust with less waste than traditional hybrid rockets that often use expensive paraffin wax, addressing key limitations in generating sufficient thrust and controlling combustion.

The investment aligns with a growing global market for hybrid rocket propulsion, which is projected to expand to $2.6 billion by 2032, up from $848 million in 2024. While the sector is becoming increasingly crowded with competitors such as Interstellar Technologies, Galactic Energy, InnoSpace, Equatorial Space, HyImpulse, and Gilmour Space, Letara is targeting satellite makers, launch companies, and governments. The company claims to have already won orders from rocket and satellite companies, as well as the Japanese government, although the financial value of these contracts remains undisclosed.

Letara’s next major milestone is an in-orbit firing test with an overseas partner, a step the company views as critical for commercialisation. To support production at scale, the startup must also establish a repeatable manufacturing process backed by quality controls and a reliable supply chain for fuel and tanks. When asked about the potential use of recycled plastic as fuel, Letara described it as “very much a possibility” subject to further testing and development.