Juul, the US-based e-cigarette manufacturer backed by tobacco company Altria, has raised $325m in new financing, according to a securities filing yesterday.
The capital is a mixture of debt and equity and was raised in the form of convertible note financing, three people familiar with the deal told the Financial Times.
One of the FT’s sources identified hedge fund manager Tiger Global Management as one of the four participants in the bridge round.
Spun off by vaporiser producer Pax Labs in 2017, Juul designs, produces and sells e-cigarette devices that deliver nicotine without burning tobacco. A report by Wells Fargo in December 2018 placed its annual revenue at $2bn.
Although the company markets its products as aids that help smokers transition away from the habit, it has faced criticism regarding its use among teenagers, and a lawsuit was launched against it this week representing minors in the state of Illinois who claim to have become addicted after using the product.
The city of San Francisco barred the sale of e-cigarettes within city limits in June this year, and the states of Ohio and New York recently raised the minimum age for all tobacco products including Juul’s devices to 21.
Altria invested $12.8bn in the company in December 2018 in return for a 35% stake, following a $650m round in July 2018 that was led by a $600m investment from Tiger Global at a reported $15bn valuation.
Juul had previously raised approximately $112m in April 2017 according to a regulatory filing. Pax Labs continues to raise money separately, securing $420m from investors including Tiger Global, Tao Capital Partners and Prescott General Partners in April 2019 at a $1.7bn valuation.
Image courtesy of Juul Labs, Inc.
