The criminal trial against fintech startup founder Charlie Javice began on Friday, with lawyers laying out their opening arguments, Reuters reported.
Lawyers reiterated their original claims and defenses from the lawsuit filed by JPMorgan Chase against Javice in December of 2022. The financial services giant alleges that Javice had helped “fake millions of customers in order to induce the bank to buy her company,” student financial planning aid startup Frank, for $175 million. That charge was also the root of an SEC complaint, which charged that Javice “made numerous misrepresentations” about Frank’s purported millions of users to entice JPMorgan.
JPMorgan claims that it found out about the alleged fraud when more than 70% of marketing test emails to a list of Frank’s customers bounced back.
Javice’s attorneys claim that JPMorgan did ample diligence and this suit is a result of buyer’s remorse due to a government change in the way financial aid forms are filled out with alleging fraud a way to get out of the deal.
Javice, now 32 years old, could be sentenced to years in prison if she’s convicted of deception and creating fake data.
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Welcome to Startups Weekly — your weekly recap of everything you can’t miss from the world of startups. Want it in your inbox every Friday? Sign up here.
Startup life is a story of births and deaths. This week confirmed this, and it confirmed that unicorn rounds are not dead.
As happens often in the startup world, it’s been a week of beginnings and endings.
Thinking machines: Thinking Machines Lab, the new AI startup of former OpenAI CTO Mira Murati, came out of stealth this week, without confirming how much it may have raised from VCs. Meanwhile, Ilya Sutskever’s startup Safe Superintelligence (SSI) is reportedly raising around $1 billion.
Humane killing: Humane, the hardware startup behind the flawed AI Pin, announced that most of its assets have been acquired by HP for $116 million.
Money back guarantee: San Francisco-based startup Future Family launched a new IVF insurance product in the United States that could refund prospective parents if treatment doesn’t succeed after two rounds.
Low battery: Former Silicon Valley darling Nikola Corp. filed for bankruptcy this week. The hydrogen electric trucking startup failed to find a buyer or secure additional funds to maintain operations.
We thought the days of counting unicorns were behind us, but not so much. Plus, legal AI is hot, and looming budget cuts inspired a new biotech venture fund.
Quadricorn: Austin-based defense startup Saronic raised a $600 million Series C to build an autonomous ship factory, also quadrupling its valuation to $4 billion from its last round.
New horn: Six months after raising a $150 million Series C at a $1.25 billion post-money valuation, AI coding startup Codeium is in talks to raise a new round led by Kleiner Perkins at a $2.85 billion valuation, sources told TechCrunch.
Joining the club: Hightouch, a startup co-founded by a former engineering manager at Segment that provides AI-powered marketing tools, closed an $80 million Series C round at a $1.2 billion valuation.
Augury, whose AI-based hardware detects malfunctions in factory machines, secured $75 million in equity funding as part of a Series F round that it is still closing. CEO and founder Saar Yoskovitz said this was an up-round valuing the startup at over $1 billion.
After the billion: After raising $1 billion to date since 2015, fintech Varo closed on $29 million out of the $55 million Series G it has been hoping to raise. Its CEO and founder, Colin Walsh, also recently announced he was stepping down.
Halfway: Sanas, which leverages AI to change call center workers’ accents in real time, closed a $65 million funding round, valuing the company at over $500 million.
Legal AI: AI-powered legal tech startup Luminance raised $75 million in a Series C funding round that follows several other deals closed by competitors, confirming the space is heating up.
New fund: Amid uncertainty on funding from the National Institutes of Health (NIH), Altitude Lab’s Pre-seed Venture Fund will consider investing $100,000 to $250,000 in biotech startups that were qualified for Small Business Innovation Research (SBIR) grants from the NIH.
Andreessen Horowitz may have $45 billion in assets under management, but Marc Andreessen isn’t “chomping at the bit to take the firm public.” Speaking on this week’s Invest Like the Best podcast, a16z’s co-founder discussed his goal of building it into an enduring company.
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Tiny Michigan biotech startup CircNova has raised a $3.3 million seed round for its technology that uses AI to target “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 DeepMind AlphaFold, in that it also uses deep learning AI — not some kind of large language model — to generate and analyze new circular RNA for therapeutic use.
CircNova has not only 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 co-founder 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.
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 Brown recalls that VCs told her, “You’re a good founder anyway.” 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 … 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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