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Friday, November 20, 
10:49 pm

Qteros raises $25M for its plant-eating, ethanol-yielding germ

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Qteros
, a startup named for a lowly, but--it hopes--powerful microbe, has raised $25 million in a Series B round from a group of backers that believe it holds the key to producing plant-based ethanol with a minimal carbon footprint.

The company, which was founded as Sun Ethanol in late 2006, recently changed its name to honor the so-called Q Microbe its technology is based on. It hopes to introduce its first commercial product by 2011. The Q Microbe is a naturally occurring organism that a University of Massachusetts-Amherst microbiology professor, Dr. Susan Leschine, discovered 10 years ago in the forest soil of Western Massachusetts. Since then, she and a team of four others who jointly founded the company have been studying the way it works and trying to enhance its productivity.

"It basically consumes plant matter and spits out ethanol," says Jef Sharp, executive vice president and co-founder of Qteros. "We have so far scaled its productivity up 15-fold, and if we can scale that up another two-fold, there will be no question that it will be the most cost-effective solution for manufacturing ethanol."

Although ethanol is a clean-burning fuel, critics have long pointed out that the production of ethanol itself is energy-intensive. Using a natural organism to produce ethanol would help reduce that footprint.

Jason Matloff, a partner with Battery Ventures who invested in both the latest round and an earlier Series A funding for Qteros, says the Q Microbe is potentially powerful source of cellulosic ethantol. It has a "very strong predisposition to metabolize cellulose that appears to be unmatched by many of the competing genetically modified organisms," he says, a breed he refers to as "Frankenbugs."

Other investors in the company include BP plc [BP], Soros Fund Management LLC, Venrock Associates, Long River Ventures and Camros Capital. Along with venture funding Qteros has received four grants from the U.S. Department of Energy totaling $3 million, and is hopeful for more.

"We expect that if [President-elect] Obama puts as much emphasis on this as he did on the campagin trail, we'll be able to receive more grants," Sharp said. --Andrea Orr

 

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