More bad news for Elon Musk, the billionaire PayPal founder who wants to sell low-cost space delivery to NASA and whoever else is buying.

On Saturday his privately funded company, SpaceX, suffered its third failed launch in a row of the Falcon 1, a two-stage rocket for ferrying satellites into orbit.

The two stages of Falcon 1's liquid-fuel rocket are designed to separate in mid-flight to shed excess weight.

The rocket successfully blasted off from the Kwajalein Atoll in the central Pacific near midnight Eastern time Saturday. It was lost two minutes and 20 seconds into launch after the stages failed to separate. (Image taken by Falcon 1's onboard camera shortly before it cut out.)

Lost along with the rocket were three small satellites, one for the Department of Defense and two for NASA, including an experimental solar sail, NanoSail-D.

Gone too were the ashes of 208 people including James Doohan, better known as "Scotty" of Star Trek fame, who had paid to have their remains scattered in space.

In a statement, Musk said that "SpaceX will not skip a beat in execution going forward," with flights four and five of the rocket nearing completion.

The first test flight was lost to a leaky fuel line about a minute in; the second flight lasted five minutes, long enough to reach space, before its second-stage began to behave erratically.

A New York Times account noted that tests of the Falcon 1 are inherently difficult because, as single-use vehicles, they cannot undergo test flights.

SpaceX is also developing a larger, reusable rocket, the two-stage Falcon 9, for carrying cargo to the International Space Station. The company successfully test fired Falcon 9's nine-engine first stage on Saturday.

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Image Credit: SpaceX