Top New York investment fund Tiger Global Management is set to invest $600 million in e-cig company Juul. According to a source, the investors have agreed to put in more than $1 billion at a post evaluation of roughly $16 billion.
Several traditional venture capitalists have always steered clear of investing in controversial industries like marijuana and firearms. Now, with firms like Tiger Management, it’s pretty safe to say that Juul’s e-cigs are a class apart. They are a spin-off from Pax Labs, a vaping company, and shows Juul is different compared to other e-cigs. According to Joel Johnson on CoDesign, “It’s black and flat with sharp edges, like half a pack of Darth Vader’s chewing gum.”
Juul’s e-cigs are designed in such a way as to look almost demure. You can insert a replaceable rod in Juul which uses a proprietary nicotine sat mixture. While other e-cigs deliver a nicotine strength of around 2.5%, Juul delivers 5% strength.
The identities of other investors have not been revealed. Juul is a fast growing company with revenue which grew more than 700% in the first quarter. According to data from Neilson and Wells Fargo, its share in the e-cigarette market exceeds 60%. Juul’s claims that its products help smokers quit.
Tiger, an early investor, has been buying Juul’s shares from earlier shareholders on the secondary market in recent months. Tiger first invested at a valuation $300 million, according to insider sources. The e-cigarette might be less addictive than conventional cigarettes, but with the backing of a solid investor like Tiger, they are sure to go places.
