Start-up to produce cheaper ethanol with microbe

The company, spun off from the University of Massachusetts, on Tuesday announced that it has raised a first round of funding for an undisclosed amount and intends to raise a second round later this year. Investors are ethanol producer VeraSun Energy, Battery Ventures, Long River Ventures and AST Capital.

The investment will be used to optimize a naturally occurring microbe, which the company calls the Q Microbe, to make ethanol, a car fuel. The microbe was discovered by Susan Leschine, University of Massachusetts professor of microbiology and company adviser, in the soil of New England.

The microbe can degrade the cellulose--essentially the fiber in green plants--and convert it to sugar, which is fermented into ethanol, explained company CEO Jef Sharp.

Making ethanol from plant cellulose, called cellulosic ethanol, is considered less polluting than making ethanol from grains such as corn. But the technology to produce cellulosic ethanol has not been used on a commercial scale, and the facilities are typically a lot more expensive to build than corn ethanol plants.

Using the Q Microbe can reduce the number of steps needed to break down plant matter into ethanol, Sharp said. Other cellulosic ethanol processes require multiple steps and use enyzmes to break down the cellulose in plants.

"It's very unusual for a microbe to have ethanol as its primary byproduct. Once we knock out some of the other things it makes, its performance will increase," Sharp said.

The Q Microbe works with a wide range of plant matter, or biomass, including grasses, wood pulp, and different forms of agricultural residue like corn husks.

The company also intends to engineer a process based on the Q Microbe. It hopes to have a demonstration plant in 2009, Sharp said.