US-based tobacco producer Altria Group is in talks to buy a stake in Juul Labs, a US-based e-cigarette manufacturer spun out of e-cigarette producer Pax Labs, the Wall Street Journal reported yesterday.
The size of the potential investment has not been disclosed.
Juul makes e-cigarettes as an alternative to traditional cigarettes and sells them both online and in convenience stores and vape shops. Juul spun out of Pax Labs in 2017 to focus on alternatives to cigarettes while Pax continues working in the hybrid market.
In July 2018, Juul raised $650m of a planned $1.25bn funding round, according to a regulatory filing which listed 10 unnamed investors. Hedge fund Tiger Global invested $600m in the round that valued the company at $15bn, reports said.
Altria, which owns cigarettes brands such as Marlboro, Parliament and Skoal, is expected to use the deal to increase its footprint in the e-cigarettes and vaping part of the nicotine products market.
In 2015, Pax raised $46.7m in a series C round that included financial conglomerate Fidelity Management, Sivia Capital, Tao Capital Partners and Sand Hill Angels. That round added to the $3.2m it previously collected in 2011, according to a regulatory filing.