Juul Labs, which is the startup company based out of San Francisco, has closed on the first $650m of a $1.25bn funding round, according to a report.
The equity fundraising, which is led by some of the biggest investors include New York-based hedge fund and venture investor Tiger Global, which values Juul at a cost of $15bn, according to a report.
The valuation for Juul, which spun out of its former parent Pax Labs to become an independent company just last year, is half the market capitalisation of 117-year-old tobacco group Imperial Brands, which owns Gauloises, Golden Virginia and Rizla.
Juul’s, has a plan to raise the total amount of $1.25bn in new funding, and The Information, were confirmed in a Form D regulatory filing to the Securities and Exchange Commission this week.
Directors named on the filing include San Francisco real estate billionaire Nicholas Pritzker, Riaz Valani of private equity firm Global Asset Capital and Kevin Burns, the former chief executive of yoghurt company Chobani who joined Juul as chief executive in the month of December.
After launching its compact $35 vaporisers in the year 2015, Juul has quickly established itself as the dominant brand in the American market, particularly among younger vapers, and is experiencing breakneck growth.
Recent research from Wells Fargo, based on Nielsen data, found that Juul’s sales grew by almost 800 per cent over the past year. Juul holds more than two-thirds of the US ecigarette market by sales, leaving traditional tobacco companies such as Imperial, Altria and British American Tobacco trailing far behind.
“Our company’s mission is to eliminate cigarettes and help the more than 1bn smokers worldwide switch to a better alternative,” Mr Burns said in a statement at the time. “At the same time, we are committed to deterring young people, as well as adults who do not currently smoke, from using our products.”
Juul’s financing comes as ecigarettes and vaporisers, most of which its product is made in Shenzhen, China, face a new threat of higher import duties.