Following reports last month that Juul was in talks with Big Tobacco for a possible minority stake in its company, it seems that nicotine-fuelled train is chugging right along.
Tobacco giant Altria, the maker of Marlboro, acquired a 35 per cent stake in Juul Labs on Thursday in a deal that put the latter’s value at approximately $38 billion (about £30 billion). The deal gives Juul a significant leg up in valuation over many of its startup contemporaries, the Journal noted, such as SpaceX and Airbnb:
The $12.8 billion cash injection could be announced as soon as this week, the people said. It would more than double what Juul was valued at just a few months ago, a sign of how quickly the startup has been growing and Altria’s desire to find growth outside its shrinking cigarette business.
Juul is now in a tricky position, both because it’s come under fire for its well-documented popularity with teens and because accepting such a huge cash investment from Big Tobacco flies in the face of its quit-smoking branding.
“At JUUL our mission is simple: eliminate cigarette smoking throughout the world one smoker at a time,” Juul CEO Kevin Burns said a statement in May. “38 million Americans and one billion people around the world still smoke. Smoking remains the world’s number one source of preventable death.”
Juul employees, some of whom appear to have been under the impression the company’s stated ethos was more important than money, characterised the Altria investment as a “deal with the devil,” Axios reported in November. The site also reported that the vape giant “rebuffed the initial interest, but Altria remained persistent, regularly coming back with higher price points.”
Featured image: Scott Olson (Getty)