QUEETS, Wash. -- A team taking a low-budget stab at the $10 million Ansari X Prize for private manned spaceflight suffered a setback Sunday, when their rocket malfunctioned and exploded after shooting less than 1,000 feet in the air.

No one was hurt in the test of the Rubicon 1 just south of Olympic National Park. The 23-foot-long, 38-inch-diameter spacecraft held three dummies simulating the weight of astronauts.

The rocket, which crashed about 200 feet from takeoff after its parachute failed to deploy, will have to be completely rebuilt, said Eric Meier, a mechanical engineer and co-founder of Space Transport Corp., of Forks.

Meier and partner Phillip Storm had hoped to reach supersonic speeds and an altitude of 20,000 feet in Sunday's flight, but Meier seemed undeterred by Sunday's failure.

"We need to raise some more money ... fix our problems and launch another low-altitude flight as soon as possible," Meier told The Associated Press. "It's a learning experience to be expected when you're developing a vehicle with this kind of capabilities."

More than two dozen teams are competing to win the X Prize, which is promised to the first organization to successfully launch a privately financed, reusable craft that makes a suborbital flight 62 miles high twice within two weeks while carrying a pilot and weight equivalent to two other people.

The first private manned spaceflight took place in June, when SpaceShipOne, a craft funded by billionaire Microsoft co-founder Paul Allen and designed by aviation pioneer Burt Rutan, reached the required altitude on a test flight. The SpaceShipOne team plans to make its first X Prize qualifying flight in late September, and a Canadian team plans its own qualifying flight a few days later.

The rocket launched Sunday cost $20,000 to build. Meier said he hoped the fact that "we work for cheap" would make raising the money to build another rocket a little easier. The partners have invested about $100,000 of their own funds in the company.