Letara, a Sapporo-based startup, has raised ¥2.6 billion (~$16 million) to develop hybrid rocket systems for space, defense and security markets, expanding beyond its original focus on satellite thrusters.

Japan has increased investment in its space industry and eased export restrictions on defense materials to support domestic aerospace companies.

The hybrid propulsion design keeps solid fuel—made from plastic and rubber—and liquid oxidizer separate, using a proprietary manufacturing process that shapes and compresses the materials for reliable ignition. The system aims to deliver higher thrust with less waste than traditional hybrid rockets that rely on paraffin wax, addressing challenges of thrust generation, performance maintenance and combustion control.

The global hybrid rocket propulsion market is projected to reach $2.6 billion by 2032, up from $848 million in 2024, reflecting a compound annual growth rate of 15%.

Letara joins other firms developing hybrid rockets, including Japan’s Interstellar Technologies, China’s Galactic Energy, South Korea’s InnoSpace, Singapore’s Equatorial Space, Germany’s HyImpulse and Australia’s Gilmour Space, as well as U.S. companies.

The company was founded by Landon Thomas Kamps and Shota Hirai while researching rocket propulsion at Hokkaido University and spun out in 2020 with an initial focus on satellite thrusters.

Letara targets satellite manufacturers, launch providers and governments, particularly in Japan, and has secured undisclosed contracts with rocket and satellite companies and the Japanese government.

Its next milestone is an in-orbit firing test with an overseas partner, a step it says will advance commercialization, and it is working to establish repeatable manufacturing, quality controls and a reliable supply chain for fuel and tanks.

Letara said recycled plastic could eventually be used as fuel, pending further testing and development.

The expansion reflects Japan’s broader push to build a domestic aerospace sector and growing demand for high‑thrust propulsion in space and defense applications.