Juul Labs Inc. aims to raise $1 billion in funding through a collaboration with Jefferies Financial Group Inc. Its current valuation is expected to be much lower than its 2018 valuation of $38 billion when Altria Group Inc. invested in it.
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LOS ANGELES, CALIFORNIA - JUNE 22: Packages of Juul e-cigarettes are displayed for sale in the Brazil Outlet shop on June 22, 2022 in Los Angeles, California. The Food and Drug Administration (FDA) is reportedly preparing to order Juul Labs Inc. to remove its e-cigarette products from the U.S. market.
Juul Labs Inc. Seeking Funding
After facing near-bankruptcy last year, electric e-cigarette company Juul Labs Inc. is now making efforts to raise approximately $1 billion in funding. The fundraising initiative involves collaboration with Jefferies Financial Group Inc.
Bloomberg revealed that the company generated around $800 million in revenue in 2022. One individual familiar with the matter noted that Juul's valuation in the current funding round is uncertain. However, it is anticipated to be significantly lower than the $38 billion valuation during Altria Group Inc.'s investment in 2018.
Altria has since divested its stake earlier this year.
Moreover, the amount Juul seeks to raise is subject to potential changes, according to the same sources. Juul's spokesperson declined to comment, and there was no immediate response from a representative of Jefferies.
Experiencing Near-Bankruptcy
Juul was on the brink of bankruptcy but received a financial lifeline in November from Nick Pritzker and Riaz Valani, longtime shareholders. This lifeline allowed the company to avoid bankruptcy and undertake a reorganization involving job cuts and a reduction in the operating budget.
Also Read: Juul Settles Youth-vaping Case for $1.2 Billion
Authorization for New e-Cigarette
Juul Labs announced its pursuit of US authorization for a new e-cigarette equipped with age-verification capabilities and measures to prevent the use of unauthorized refill cartridges, Reuters reported.
Vaporizer JUUL2 System was initially launched in Britain in 2021 and comes with a unique Pod ID chip to combat counterfeit cartridges. Additionally, an app is incorporated to restrict access to underage users.
Juul Labs submitted its latest premarket tobacco product application to the US Food and Drug Administration on Tuesday to gain approval. The application includes a request to sell tobacco-flavored pods with less than 2% nicotine concentration. This move aims to address concerns surrounding youth usage of e-cigarettes and reinforce responsible access to their products.
The manufacturer has been entangled in a battle with the FDA to secure approval for its existing products. These products faced a temporary ban last year due to numerous lawsuits alleging Juul was responsible for a surge in teenage vaping.
Despite these challenges, CNN reported that the company remains determined to seek approval for its current products and plans to submit additional filings to introduce new e-cigarette alternatives.
Furthermore, Juul intends to appeal the FDA's decision that is currently stayed. This move reflects the company's commitment to navigating regulatory hurdles and expanding its product offerings amidst the changing landscape of the vaping industry.
It is worth noting that Altria, the maker of Marlboro, was a former investor in Juul. While Altria has since divested its stake, Juul continues to forge ahead with its regulatory efforts and strategic growth plans.
Related Article: Juul Reaches Settlement of $438.5 Million Over E-Cigarette Marketing Probe
