Japan rocket start-up Interstellar gets $29m Series D

More than 20 investors participated in the round, including SBI Investment, CyberAgent, and Seven Stars Capital, as well as corporates such as Satudora Holdings, Sanko Industries, Hagiwara Construction, and Kadokawa Corporation. The company closed the first tranche of the Series D on JPY 1.87bn last April and announced a JPY 1bn investment from SBI in December.

According to AVCJ Research’s records, Interstellar raised JPY 10.1m from Hokuyo Finance and Hokkaido Venture Capital in 2017. Hokkaido Venture Capital re-upped in a JPY 1.22bn round two years later, joined by Obihiro Shinkin Bank and various individual investors, and then a JPY 1.77bn round – featuring the likes of CyberAgent and Seven Stars – closed in late 2021.

Much of the capital targeting Japan’s space technology industry has focused on iSpace, which develops commercial lunar landers and is looking to complete its own lunar missions. The company’s JPY 5.1bn Series C closed in mid-2021 with commitments from SBI among others.

Interstellar started out in 1997 as a hobbyist organisation for people interested in small-scale rocket technology capable of launching satellites at low cost. The company was formalised in 2005 – it wasn’t established as Interstellar until 2013 – and completed its first rocket engine combustion test in 2008. A development base was built in Hokkaido a year later.

Momo, the company’s first rocket capable of suborbital flight, launched in 2017 and reached an altitude of 20 kilometres. Two years later, Momo became the first commercially developed Japanese rocket to reach the Kármán line, recognised as the boundary between the earth’s atmosphere and outer space, which is roughly 100km above sea level. Two more successful launches came in 2021.

Interstellar is now developing a new rocket called Zero that is intended to carry microsatellites of up to 100 kilogrammes to altitudes of around 500km. It is targeting a cost per launch below JPY 600m. The Series D proceeds will support these efforts.

The company noted in a statement that the global space technology market is expected to be worth JPY 110trn by 2040, nearly three times its current size. Demand for small-scale satellites is growing significantly, but Japan only sees a handful of launches every year, about 2% of the global total.

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• Topics
• North Asia
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• SBI Holdings