Tiny Michigan biotech startup CircNova has raised a $3.3 million seed round for its technology that uses AI to target so-called “circular RNA.” The development holds promise as a new method to quickly develop therapies for conditions that currently have no drug treatments.
The new funding is also a victory lap for co-founder and CEO Crystal Brown, who took an unconventional path to becoming a biotech founder.
RNA, or ribonucleic acid, is a key molecule that helps convert genetic information into proteins. Circular RNA is a relatively newly discovered class of such structures that form a circle rather than a strand. It regulates critical biological processes and the hope is that therapies based on these molecules will be able to target complex health issues.
CircNova has developed a “proprietary AI engine that allows us to identify, design, and then produce novel, non-coding, circular RNAs,” Brown told TechCrunch.
It’s an AI engine similar to Google’s AlphaFold in that it also uses deep learning AI – not some kind of LLM – to generate and analyze new circular RNA for therapeutic use.
CircNova not only has its NovaEngine, which it says is the first in the world to be able to predict circular RNA structures, but it also has a wet lab. That means its AI engine produces the actual physical molecules themselves, which can then be validated and researched in collaboration with the University of Michigan, Brown said.
“We can reverse engineer. We can go from sequence to structure. We can go from structure to sequence when developing the molecule,” she says.
The goal is to “treat diseases we haven’t treated so far, things like ovarian cancer, triple-negative breast cancer, neurodegenerative diseases, rare genetic diseases,” she describes.
The tech is based on the work of CircNova cofounder Joe Deangelo, the startup’s chief scientific officer and previous CEO of biotech Neochromosome as well as the former CSO of Apex Bioscience. Investor William Grenawitzke is chief business officer and the startup’s third co-founder.
Lessons from a failed startup
Brown seems like an unlikely founder of such a company because until about seven years ago, her career had been in the automotive manufacturing industry.
She thought she was climbing the ladder to become a “C-suite automotive executive” when a friend of hers introduced her to a CEO running a life science startup. The startup CEO was looking for a business manager.
Curious, Brown offered to keep the books part-time, which evolved into her bringing business tactics from auto factories to help the startup, like overhauling their business contracts.
She peppered the team with questions about the science until some of her friends told her she should quit automotive and work full-time in biotech.
“I was like, no one’s gonna take me seriously. I’ve never studied biology. I studied poli sci and women’s studies,” she recalls.
But she made the leap anyway, taking a massive pay cut from her well-paying six-figure job to what amounted to intern-level pay. She learned about startups, raised money, and worked her way up to director of operations. The company went public, giving her a healthy enough payout to buy a house, she said.
Flushed with success, she launched a biotech startup of her own, a contract research lab.
She raised money, then made all the classic first-founder mistakes. “I hired people too quickly. I opened up my lab,” she said.
Two years in, her startup burned through its funds, and she knew she had to shutter it. It broke her heart and her bank account. She even lost her house, she recalled.
But she had gained a stellar reputation in Michigan’s tight-knit startup community and VCs told her “You’re a good founder anyway,” Brown recalls. Several said they’d be open to funding her next idea.
Knowing she would soon be available for a new venture, Deangelo began sending her scientific material on circular RNA. He had an idea for how to use it with AI drug discovery.
“He started sending me, literally every morning at 5:30 AM in the morning, five to 10 articles,” she remembers. “I hadn’t even shut the other company down all the way.”
But she studied up and grew convinced this idea could work. They founded CircNova in May 2023.
“I went into it very cautiously, throwing just a few things at the wall. What can I do with the $15,000 grant to get it started?”
That first expenditure developed the startup’s first process and another $25,000 from a National Science Foundation grant led to the first patent application.
She began to split her time between Michigan and Boston, near her customers and wish-list customers like Moderna and Pfizer.
As for betting on Brown again, VCs like Nia Batts, a General Partner at Union Heritage Ventures, had no problem with it.
“We are no stranger to the resilience that is needed when you engage in the journey of entrepreneurship,” Batts said, adding that she knew she wanted to back this new venture “the moment” she met Brown and heard about the idea.
This $3.3 million seed round was led by diversity-focused VC South Loop Ventures and includes investment from Dug Song, Union Heritage, Michigan Rise, Invest Detroit, Kalamazoo Forward Ventures, and SPARK Capital.
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