Company Name
QTeros

Company Web Site
http://www.qteros.com/

Headquarters
Hadley, MA

Latest News
July 23, 2009
Qteros, formerly SunEthanol, recently announced an ethanol yield well beyond what the U.S. Department of Energy considers the threshold for commercial production, he wrote.

Qteros says it's achieved an ethanol yield of 70 grams per liter. The DOE's commercial standard is 50 grams per liter.

"To date, this is the most economical and viable cellulosic process announced by any cellulosic company," Salyer says.

"Additionally Qteros has achieved these results without yet genetically modifying its microbe strain - something the company is working on now which they expect will further increase their output."

Qteros uses a technology called Q Microbe, which turns biomass into cellulosic ethanol, according to company officials.

"These results confirm what we predicted: Qteros and the Q Microbe can make cellulosic ethanol a commercial reality." according to Sue Leschine, the University of Massachusetts-Amherst microbiologist who first discovered the Q Microbe near the Quabbin Reservoir in central Massachusetts.

Company officials describe the Q Microbe as a super-bug with unique properties that make it ideally suited to the production of cellulosic ethanol from a variety of non-food plant materials. They say it's the "yeast" component of the conventional bioconversion process plus the enzyme component, all in one.

Qteros has been funded by companies including BP, Valero, Soros Quantum Fund, Battery Ventures and Venrock.

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May 18, 2009
San Antonio, Texas-based Valero Energy (NYSE:VLO) takes VeraSun Energy's stake today as an investor in Marlborough, Mass.-based Qteros.

Valero established the investment, for an undisclosed amount, through the acquisition of assets of VeraSun, which ceased operations after it filed for bankruptcy last year (see VeraSun reportedly near bankruptcy).

Qteros, formerly known as SunEthanol, developed technology that turns biomass into cellulosic ethanol. Last year, Qteros raised $25 million in a round in which previous investor VeraSun was notably absent (see Qteros claims 15-fold improvements in cellulosic ethanol yield).

"Investment from established energy companies like Valero enables us to continue developing and scaling-up our technology," said Bill Frey, CEO of Qteros and former head of Dupont's biofuels division, in a news release. "Qteros is moving ahead with our plans to open a pilot plant this year as we continue preparations to expand to commercial scale production."

Qteros also said today it has received $2 million in U.S. government appropriations for a pilot plant expected to open this summer in Springfield, Mass. Qteros investors include Venrock, Battery Ventures, BP, and Soros Fund Management.

In March, Valero won a bankruptcy auction to buy seven corn-based ethanol plants from South Dakota-based VeraSun for $477 million, plus additional working capital. The seven plants have a combined production capacity of 780 million gallons of ethanol per year (see Valero eyes cellulosic ethanol with $477M VeraSun buy).

There were three bidders for the remaining plants: Dougherty Funding bid $93 million for a facility in South Dakota; a group of lenders led by AgStar Financial Services bid $324 million for six facilities in Nebraska, Iowa, North Dakota, Minnesota and Michigan; and a group of lenders led by West LB bid $99 million for two production facilities in Ohio and Indiana.

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(Note: More information on QTeros can be found at this web site by accessing the data for SunEthanol)

November 18, 2008
Oil giant BP and George Soros'investment firm are putting millions of dollars into a company that has isolated a microbe that can create ethanol.

Qteros, formerly called SunEthanol, on Tuesday announced the $25 million series B round of funding, which was led by venture capital firm Venrock and Battery Ventures. Other investors were BP, Soros Fund Management, and first-round investors Long River Ventures and Camros Capital.

Massachusetts Gov. Deval Patrick--a clean-energy industry backer--announced the funding and new company name at the Fourth Conference on Clean Energy here Tuesday.

The basis of Qteros is the Q Microbe, a micro-organism discovered in the woods near the Quabbin Reservoir in western Massachusetts by University of Massachusetts professor and now Qteros chief scientist Susan Leschine.

The naturally occurring bug is able to efficiently produce ethanol from the cellulose in plants, according to Qteros. The company has spent the past year breeding different strains of the bug to enhance certain characteristics and make it more productive.

The money it raised will be used for further product development and to build a pilot ethanol facility next year, using agriculture residues, sugar cane bagasse, and corn stover as feedstocks. After that, it intends to do a larger demonstration facility in 2010 and then operate a commercial-scale plant in 2011.

The microbial approach to making ethanol, called consolidated bioprocessing, is a potential breakthrough in cellulosic ethanol production.

Many start-up biofuels firms are developing different methods for converting wood chips, grasses, and agriculture or forest residue into the liquid fuel ethanol, which is a gasoline additive.

By using microbes to make cellulosic ethanol, Qteros intends to streamline a multi-step process and entirely eliminate the use of expensive enzymes, which can account for roughly 30 percent of production costs.

"Using the Q Microbe as a keystone piece eliminates large amounts of capital, large amounts of cost, and makes the process economic," said Qteros CEO William Frey who led BP's biofuels business before joining the company.

Another company pursuing a similar path is Mascoma, a well-funded ethanol company spun out of the University of Dartmouth. It, too, is developing micro-organisms to make ethanol without enyzmes, but its scientists are genetically engineering the microbes.

Qteros Executive Vice President Jef Sharp said that optimizing a naturally occurring microbe alllows Qteros to make ethanol "without the lengthy, expensive, and genetic engineering requirements of taking another bug to do it."

Rather than build ethanol plants itself, Qteros plans to license its technology to ethanol producers which plan to diversify from corn ethanol into other feedstocks, said Frey.

Funding
$25 million series B round of funding,led by venture capital firm Venrock and Battery Ventures. Other investors were BP, Soros Fund Management, and first-round investors Long River Ventures and Camros Capital.

Technology
(Original press release)
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™ technologyfor 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, bothnew, 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, value add 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 QMicrobe™ 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 over15-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 JasonMatlof, 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 cleantech 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 ableto realize the full potential of the Q Microbe™ to convert cellulosic feedstocks into ethanol, and to help move America towards energy independence.”