A US$2.7 million ($4m) rocket developed by a maverick Japanese entrepreneur exploded shortly after liftoff on Saturday.

Interstellar Technologies, founded by popular internet service provider Livedoor's creator Takafumi Horie, launched the unmanned rocket, MOMO-2, from a test site in Taiki, southern Hokkaido.

Takafumi Horie hoped that his Momo rocket would be Japan's first private rocket launched in Japan. Picture / Youtube
Takafumi Horie hoped that his Momo rocket would be Japan's first private rocket launched in Japan. Picture / Youtube

The rocket crash was a major blow to his bid to send Japan's first privately backed rocket into space. His first MOMO rocket launch last year also ended in failure.

But television footage showed the 10-metre rocket crashing back down to the launch pad seconds after liftoff and bursting into flames.

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No injuries were reported in the spectacular explosion.

Horie posted pictures on Facebook of the Interstellar Technologies team with the charred remains of the rocket.

In his post, he said: 'Thank you for your report. The launch experiment of Momo2 is finished. The launch of a rocket and launch site after a free fall has been secured around 13:20 today.

'The firing range of the scene has been burned, but there is no damage to the large facilities. We would like to report and thank you for all your support, as we have finished the experiment without personal damage. Thank you so much for all.

'I could not reach the universe, but I would like to continue to determine the data analysis and cause of this time. In some way, I will report back to you about the results of the experiment.

'This time too many people have carried their feet to taiki-Cho. I'm sorry I can't follow your expectations, but I would be happy if you could watch the challenge next time.

I will continue to challenge the universe. Thank you for your patronage.'

The launch was supposed to send the rocket carrying observational equipment to an altitude of over 100 kilometres.

The failure follows a previous setback in July last year, when engineers lost contact with a rocket about a minute after it launched.

Interstellar Technologies said it would continue its rocket development programme after analysing the latest failure.

The outlandish, Ferrari-driving Horie - who helped drive Japan's shift to an information-based economy in the late 1990s and the early 2000s but later spent nearly two years in jail for accounting fraud - founded Interstellar in 2013.

However, privately backed efforts to explore space from Japan have so far failed to compete with the government-run Japan Aerospace Exploration Agency.

The rocket crashed on the launchpad moments after launching and burst into flames. Photo / Youtube
The rocket crashed on the launchpad moments after launching and burst into flames. Photo / Youtube

But private spaceflight is also reaching new heights (literally) in the country.

According to engaget.com, the initial launch of the Momo rocket last year also ended in failure, when an early shutdown of the engine caused it to only achieved an altitude of around 20 km.

If Horie is successful Momo would be first private rocket launched in Japan developed by a Japanese company.

According to engaget, Takafumi Horie, the Japanese entrepreneur behind Momo, said on his Facebook page, "We were able to get valuable data that could lead to success in the future." Momo's goal is to successfully develop a rocket that can deliver a small satellite to low Earth orbit by 2020.

Horie is not the only billionaire to invest his fortune into space technology.

Elon Musk's SpaceX has enjoyed much more success. Its achievements include being the first privately funded company to successfully launch, orbit, and recover a spacecraft.