Tuesday, November 18, 2008

SunEthanol renames as Qteros, raises $25M Series B fund

By Mass High Tech Staff

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At today's Conference on Clean Energy, Gov. Deval Patrick gave a keynote speech announcing that University of Massachusetts Amherst spinout SunEthanol Inc. has changed its name officially to Qteros and has raised $25 million in Series B financing.

According to Qteros CEO William Frey, the name change is intended to reflect the company’s core technology, the Q-Microbe, which was discovered by company founder and chief scientist Susan Leschine. The Q-Microbe digests and ferments cellulosic feedstocks to ethanol in a single-step process.

The $25 million funding was led by new investor Venrock, as well as Battery Ventures. Other new investors included BP and SorosFund Management LLC, in addition to returning backers Long River Ventures and Camros Capital. Qteros plans to use the funds in part to add staff, according to executive vice president Jef Sharp, who said the 20-employee company is targeting a staff of 50 eventually.

Sharp also said Qteros is planning to have a demonstration site online by 2010, and to reach commercialization by 2012.

In August, Hadley-based SunEthanol announced a collaboration with Michigan-based biotechnology firm MBI International, a wholly owned subsidiary of the Michigan State University Foundation, to scale up a fermentation method for producing ethanol from non-food agricultural feedstocks using the Q-Microbe.

SunEthanol in June named former DuPont Applied BioSciences leader Frey as its new CEO. Later that month, SunEthanol entered into a research collaboration agreement with Harvard University’s Office of Technology Development to develop new genetic strains of the Q-Microbe, in the laboratory of George Church, a professor of Genetics at Harvard Medical School and director of the Center for Computational Genetics.

SunEthanol has landed an undisclosed amount of funding from Waltham’s Battery Ventures, Hadley’s Long River Ventures and South Dakota’s VeraSun Energy. The company was chosen by the U.S. Department of Energy to participate in the agency’s $114 million project to build four small-scale biorefineries across the country, announced in February.