[DigitalToday reporter Jinju Hong] Japan's space technology startup Letara has raised 2.6 billion yen, or about $16 million, and is expanding its business from propulsion systems for small satellites to large rocket systems. It aims to broaden the application of its hybrid propulsion technology into defence and security as well as space.

TechCrunch reported on Aug. 22 that Sapporo-based Letara will use the funds to develop hybrid rocket systems targeting the space, defence and security markets.

The fundraising was jointly led by Headline Asia, JIC Venture Growth Investments and Incubate Fund. Networked Energy Services, Toyoda Gosei and Greek data analytics company Frontier Innovations also joined as strategic investors.

Letara co-CEO Shota Hirai (쇼타 히라이) said the investment would help the company move beyond proving propulsion technology in space to securing broader uses. The company plans to develop and propose different hybrid rocket systems tailored to demand in space and in defence and security.

Letara's core technology is a hybrid rocket design that separates solid fuel and a liquid oxidiser. For solid fuel, it uses relatively inexpensive and readily available materials such as plastic and rubber.

The company said it developed its own manufacturing process to mix, mould, compress and shape those materials, improving ignition stability and combustion consistency. It said the approach can deliver higher thrust and lower losses than existing hybrid rockets based on expensive paraffin wax.

Hybrid propulsion can combine the strengths of solid and liquid rockets, but it has faced limits in securing sufficient thrust while maintaining performance and precisely controlling combustion.

Hirai said those three issues have been the main reasons hybrid propulsion has not been widely used. Letara is focusing its development capabilities on solving them.

The company is also expanding its business direction quickly from satellite thrusters. When Letara was spun out of Hokkaido University in 2020, it focused on developing thrusters for small satellites, but it has recently broadened opportunities to include launch services and defence contracts.

The company said high-thrust propulsion systems are also needed for large spacecraft and launch vehicles. It said high thrust is particularly important when moving from low Earth orbit to geostationary orbit to pass through radiation belts quickly. Letara also believes demand for launch vehicles is increasing rapidly.

Letara said it sees satellite manufacturers and operators, launch companies and governments as its main customer base. It expects commercial satellites to be the largest source of demand in the space propulsion market, and it expects government demand for rocket systems to expand, centred on Japan.

Letara said it has already secured orders from rocket companies, satellite companies and the Japanese government. It did not disclose contract sizes.

The next step is an in-orbit ignition test with an overseas partner. Letara sees the test as a key milestone for commercialisation. Building a mass-production system is also a task. The company said it needs to secure a repeatable production process based on quality control, while also building a supply chain that can stably supply fuel and tanks.

Competition is also intense. Companies 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 are developing hybrid rocket technology. Letara aims to secure competitiveness in the global space, defence and security markets rather than staying in Japan.

Letara is also considering using recycled plastic as rocket fuel in the future. It said that given its current hybrid propulsion technology, the direction is feasible, but additional testing and development are needed for practical application.

Letara started with propulsion systems for small satellites, but with the investment it is expanding into large rocket systems. Competition among Japanese space startups is expected to broaden beyond satellite components into launch vehicles and defence.