If only funding for biofuel startups were as omnipresent as spilt oil in the Gulf. That’s not the case, of course, as biofuel firms have struggled to find cash. Yet Qteros, a Marlborough, MA-based developer of cellulosic ethanol, has a plan to remove some of the typical financial aches from its business.
Qteros, which has raised nearly $30 million in venture capital to date, has developed an experimental process for making ethanol from plant waste and other non-food sources that could someday make the cost of biofuels competitive with fossil fuels. John McCarthy, CEO of the startup, joined the company in January after engineering a $90 million partnership between his previous employer, the Cambridge, MA-based biofuel developer Verenium (NASDAQ:[[ticker:VRNM]]), and the energy giant BP (which is, of course, at the center of the oil spill crisis in the Gulf of Mexico).
In an interview yesterday, McCarthy said that Qteros doesn’t need as much capital as some of its competitors to succeed.
Lebanon, NH-based Mascoma, for one, has fallen behind schedule in raising money to build a cellulosic ethanol plant in northern Michigan, company CEO Bill Brady told Xconomy last month. Brady said that such facilities cost north of $100 million, but he declined to reveal exactly how much his firm needs to finance the project.
Qteros, conversely, doesn’t want to build or operate ethanol plants. The 50-person firm wants to make money from licensing its technology to other companies that have, at least in some cases, already invested in building ethanol facilities, McCarthy said. The startup needs capital to fund its research and development, but that amount will be way less than the amount needed to erect ethanol plants.
In Qteros’s licensing model, some ethanol producers would incorporate its technology into their existing plants. McCarthy said that retrofitting existing facilities to use his firm’s technology would be less expensive than
