Qteros Secures $22M in Series C Financing and Closes Strategic Partnership with Praj Industries

April 4, 2011 - Long River Ventures announced today that portfolio company Qteros, Inc., developer of a unique and highly efficient Consolidated Bioprocessing (CBP) platform for the lowest-cost production of cellulosic ethanol, has closed an initial $22 million tranche in its Series C financing. The completion of this $22M financing is expected to provide sufficient funding to accelerate the Company's development and commercialization plans. In addition to Long River Ventures, investors in the round included Venrock, Battery, BP, Camros, and Valero

"I'm pleased to have completed this first phase of financing for the Company which represents broad participation from both existing and new investors," said John A. McCarthy, Jr., President and CEO of Qteros.

Qteros, formerly known as SunEthanol, spun out of a lab at UMass-Amherst in 2006. The business was incubated in Long River Ventures' Amherst area office and funded initially by Long River Ventures and Battery Ventures. Since that seed funding, Qteros has raised $52MM in venture funding and currently employs 50 people. The company, now headquartered in Marlborough, MA, is opening a larger scale fermentation facility in Chicopee in early 2011.

In conjunction with the new financing, Qteros also closed on a strategic partnership and commercialization agreement with Praj Industries Limited (BSE: 522205, NSE: PRAJIND), a global leader in the development of innovative technology and engineering solutions for the production of biofuels and biochemicals. Praj has built 450 ethanol plants, most of which are located in India, Southeast Asia and Africa and are producing ethanol from sugar or molasses. This coming year, Praj will retrofit a plant in India to serve as a demonstration facility for Qteros's technology. Praj and Qteros will be working together over the next 18 to 24 months to develop "Process Design Packages" that will be licensed to companies that want to produce cellulosic ethanol from a wide variety of non-food feedstocks, ranging from residual waste remaining in the current corn and sugar based ethanol facilities to wood pulp, switchgrass, and other energy crops.

"Our partnership with Praj represents a transformational initiative for Qteros," stated McCarthy, Jr. "We and Praj share close strategic and philosophical alignment about the worldwide opportunities for large-scale cellulosic ethanol production and believe that commercial success can only be achieved with low-cost, highly scalable solutions made possible through creative and best-in-class partnerships such as that crafted between our two companies. We look forward to making our shared vision with Praj a commercial reality within the next 18-24 months, which will allow our companies to gain market leadership in the cellulosic ethanol industry".

"The Praj partnership and the Series C financing position Qteros to bring its technology to the marketplace," commented Tripp Peake, Managing Partner, Long River Ventures. "The Company has made significant advancements in the lab and small-scale piloting facilities. The team has proven it can manufacture ethanol from an array of cellulosic materials at a commercially viable cost. Now we have to scale it and get it to market."

About Qteros, Inc.
Qteros' mission is to accelerate the global commercialization of large-scale, lowest-cost cellulosic ethanol production. Qteros has teamed with a core group of world-class strategic partners that complement and leverage our advanced microbiology and process engineering expertise. Working closely with its strategic partners, Qteros expects to rapidly scale its highly efficient, lowest-cost Consolidated Bioprocessing (CBP) platform for converting non-food biomass into biofuels. Qteros is funded by leading investors in the alternative energy industry including, among others, BP AE Ventures, Soros Fund Management LLC, Valero Energy Corporation, Venrock Associates, Battery Ventures, and Long River Ventures. For more information, please visit www.qteros.com.

About Praj Industries Limited
Praj is a global Indian company that offers innovative solutions to add significant value to bio-ethanol facilities, brewery plants, water & wastewater treatment systems as well as process engineering, plant & equipment for customers worldwide. With over 450 references across five continents, Praj is a leading Ethanol Technology & Plant supplier with a strong focus on second-generation bioethanol process development. Praj Matrix - the innovation center, is the R & D Center of Praj Industries. Praj is a knowledge-based company with expertise and experience in bioprocesses and engineering. It delivers know-how, license, engineering design, plant & equipment, project management, commissioning and customer care, and turnkey projects. Led by an accomplished and caring leadership, Praj is a socially responsible corporate citizen. Praj is listed on the Bombay and National Stock Exchanges of India. For more information, visit www.praj.net.

About Long River Ventures
Long River Ventures invests in seed and early stage companies in healthcare, IT, and cleantech sectors. Formed by a group of experienced entrepreneurs and venture capitalists, Long River is designed and structured to invest smaller amounts of capital as a first institutional investor in promising new companies. Long River has offices in Boston, Worcester, and Amherst MA. For more information, visit www.longriverventures.com.