SunEthanol, an Amherst, Mass.-based developer of cellulosic ethanol production technology, has raised $25 million in Series B funding. Venrock led the round, and was joined by BP, Soros Fund Management and return backers Battery Ventures, Long River Ventures and Camros Capital. Past backer VeraSun did not participate, after having recently filed for Chapter 11 bankruptcy protection.
The company also announced a name change to Qteros.
SunEthanol has raised $25 million in Series B financing from a consortium of funders including BP and Soros Fund Management LLC, and is changing its name effective immediately to Qteros. The new name refers to its breakthrough Q Microbe™ technology for producing sustainable liquid fuel from non-food plants and wastes.
Leading the Series B financing is new investor Venrock, along with previous investor Battery Ventures. Also participating in the Series B financing are Soros Fund Management LLC and BP, both new, and Series A investors Long River Ventures and Camros Capital.
Massachusetts Gov. Deval Patrick today announced Qteros’ new name and Series B funding in a speech in Boston at the Fourth Conference on Clean Energy during Clean Energy Week in Massachusetts. Qteros has been singled out as one of the state’s premier clean-tech companies. It will be celebrated on Thursday, Nov. 20 along with other outstanding Massachusetts green companies at the “Green Tie Gala” at Boston‘s Museum of Science.
Gov. Patrick has been a staunch supporter of the company, describing it as discovering and now commercializing a “transformational breakthrough.” Other state and national leaders have also recognized Qteros this year as one of the most promising emerging clean energy companies, and it has received four U.S. Department of Energy grants and a grant from the National Science Foundation.
The biofuels startup that began with a professor’s discovery in the woods of Massachusetts of an exceptionally efficient microbe for making cellulosic ethanol will now scale up its process from the pilot plant to commercial operations, and hire additional engineers and scientists, company officials said.
“Qteros and the Q Microbe™ will make a major contribution to achieving the two-pronged objective of energy independence and reduced emissions of global warming gases,” said company President and CEO Dr. Bill Frey, who spent 28 years at DuPont and led DuPont’s biofuels division before taking the reins of SunEthanol in June. “We are very pleased to be working with some of the best, valueadd investors in the world. These partners will allow us to get to market with people who are experts in building very large and valuable companies.”
Steve Goldby, the Venrock partner on the investment, commented, “The past century has seen extraordinary innovation in chemistry, and we believe that fundamental biology will hold the secrets of world-class innovation for the next century. Qteros’ microbial approach to the production of cellulosic ethanol has the potential to revolutionize the production of clean energy for the country.”
Congress has mandated production of 36 billion gallons a year of biofuels — 16 billion gallons of which must be advanced cellulosic biofuels such as Qteros is working to produce. That would figure prominently in President-elect Obama’s plan to reduce or eliminate America’s dependence on foreign fossil fuels by investing $150 billion in clean energy technology over 10 years. Qteros is poised to be a key contributor to realizing that goal.
Dr. Susan Leschine, Qteros’ Chief Scientist and co-founder, is the University of Massachusetts, Amherst microbiology professor who, nearly 10 years ago, first collected a sample of the Q Microbe™ near the Quabbin Reservoir in Massachusetts. She sees the company’s success as the realization of her dream of finding a “super-bug” that can leapfrog the conventional enzyme technologies in terms of cost/benefit, and help solve the world’s energy crisis.
“In the past year, we’ve made great strides in understanding the inner workings of Q, basic knowledge that is enabling the advancement of this technology and from which Qteros is discovering ever-more productive strains of this amazing microbe,” Dr. Leschine said.
Led by Dr. Sarad Parekh, Vice President of R&D, the Qteros lab team has already achieved an over 15-fold increase in productivity with its C3 (Complete Cellulosic Conversion) technology platform for using the Q Microbe™ to convert cellulosic plant material to ethanol.
“Over the last year, the SunEthanol team has demonstrated that the patented Q Microbe™ and the ‘C3’ process is the industry’s most advanced cellulosic ethanol technology platform,” said Jason Matlof, partner at Battery Ventures. “This infusion of capital and the addition of world-class strategic partners will further enable the team to achieve our goal of commercializing a sustainable and cost-effective cellulosic biofuels platform.”
According to Founder and Executive Vice President Jef Sharp, “This investment in Qteros during difficult financial times is a reminder that new technologies will be the generators of the clean tech future. Qteros’ success will help to ignite the next economic expansion while helping to solve climate change and sustainable energy challenges.”
“Biofuels are the only near-term alternative to gasoline for liquid transportation fuels,” added Frey. “With our company’s new financing from this group of experienced partners, we will be able to realize the full potential of the Q Microbe™ to convert cellulosic feedstocks into ethanol, and to help move America towards energy independence.”
About Qteros (formerly SunEthanol)
Qteros is a venture-backed company committed to delivering innovative process technologies for clean transportation fuels that reduce greenhouse gas emissions at a price competitive with gasoline. Qteros is scaling up a unique microbial solution for converting non-food plants and waste into clean transportation energy. The Qteros scientists and business team are dedicated to producing liquid fuels to achieve a sustainable solution to the world’s growing energy needs. Effective Nov. 18 its website may be found at www.qteros.com.