Qteros Lands $22M, Inks Partnership
On Jan. 4, Qteros, the 50-person biofuel-development startup in Marlborough, announced a strategic partnership with an Indian company to expand the Qteros technology around the world.
A day later, Jan. 5, Qteros announced it received $22 million in new venture capital financing from a handful of investors.
Officials with the company say those two moves bundled together could be the key to bringing Qteros's ethanol-production technology global. The company has developed a new way of producing ethanol and is hoping owners of ethanol production facilities around the world will integrate the Qteros technology in their manufacturing plants. Ethanol is a cleaner burning fuel that is mixed with oil to create gasoline.
"There is an enormous opportunity to scale ethanol up to a much more significant use in our fuel stock and other even broader applications," said John McCarthy, president and CEO of the company.
Armed with a new partnership and new financing, McCarthy and other Qteros officials are banking on an ethanol bandwagon to sweep the globe.
Micro Discovery
The basis for Qteros's business lies in a microorganism found in the Quabbin Reservoir by a UMass researcher.
The micro-bacteria break down bio-substances and convert them into ethanol.
Ethanol is mainly produced today using a variety of biomass materials, from corn to wood to sugars. The problem is those raw materials are used for other products as well, like food and paper.
The Qteros technology can convert non-food biomass into ethanol. So instead of using an ear of corn to make ethanol, with the Qteros technology, the corn husk can be used.
Qteros officials are hoping the company's technology can be installed at ethanol production facilities that are already up and running around the world. That may happen first in India, where Qteros will be working with Praj Industries, a company that has helped to construct more than 400 ethanol production plants.
Manufacturers that add the Qteros technology increase the production of the facility while decreasing waste, according to McCarthy.
There are, however, some issues holding back the ethanol industry, and as a result Qteros.
Namely, the oil industry and car manufacturers don't have an incentive to allow ethanol to replace gasoline. The more ethanol that is used, the less oil is used in gasoline.
Despite the challenges, McCarthy is bullish on ethanol demand in the coming years.
The U.S. government has instituted new mandates requiring more ethanol be produced in the country and used in gasoline. More cars in the coming years will be able to run on ethanol, which will only create increased demand for the fuel, McCarthy said.
While much of Qteros's technology will be used outside of Massachusetts, McCarthy doesn't expect the company to move out of MetroWest any time soon. In fact, he expects to hire between 10 and 15 employees this year and perhaps double the size of the company within five years.
The company's investors include Venrock Associates in California; Battery Ventures of Boston and California; Valero Energy Corp. in Texas; BP AE Ventures and Soros Fund Management LLC, which both have international operations.
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