Qteros begins to power down?

Nov 18, 2011

Dan Primack was a senior editor at Fortune from 2010 to 2016. He was also the author of Term Sheet, Fortune's daily newsletter about deals and dealmakers.

Biofuel startup Qteros has laid off CEO John McCarthy and most of its other Boston-area employees, Fortune has learned.

The Marlborough, Mass.-based company was founded in 1996 as SunEthanol, with a focus developing and commercializing cellulosic ethanol. It raised over $35 million in venture capital funding, from such firms as Battery Ventures, Venrock, Long River Ventures, BP (bp) and Valero Energy (vlo). There also was a Dow Jones report in July that the company was seeking to raise an additional $40 million, but that round does not appear to have ever closed.

It sounds to me like existing investors were looking for an outside lead, failed to find one and chose to begin winding things down. In fact, two sources I've spoken with say that Qteros plans to seek a buyer (for its IP, facilities or both).

So this morning I called Susan Hager, head of Qteros communications who remains listed on the company's website. She said she could no longer speak for the company (i.e., laid off), and that I should contact Jason Matlof, the Battery Ventures partner who sits on Qteros' board of directors.

Matlof replied to an email, saying that “the company is not making any comment on the change in strategic direction.” I followed up, asking if the “strategic” change is code for an effective shutdown with plans to sell the IP. He said no, without further elucidation. Either there was a major communications breakdown during the layoffs, or else Matlof is trying a bit of PR spin. Still trying to get clarification.

Update: Word is that Mick Sawka, Qteros senior VP of engineering and commercial development, will take over as CEO. Got to wonder if that means they're planning a licensing model going forward, or if sale remains most likely end game...


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