You can't vape with us
Yesterday the FDA announced that Juul cannot sell its e-cigarettes in the US anymore — a huge blow for a company that was recently one of the most highly-valued startups in all of America.
Juul was the brainchild of two graduate students of product design at Stanford who wanted to make cigarettes that were healthier, better smelling... and cooler. They succeeded.
After launching in 2015 it took just a few short years for Juul's e-cigarette to hit the big time. Its USB-stick-looking vaporizer came in flavors like mango, creme and mint and teenagers loved them. By late 2017 they had 20% of the e-cigarette market. One year later they had over 70%. Juul seemed unstoppable, and big tobacco took notice.
Up in smoke
Juul Labs had been spun out of its parent company, and had notched a substantial valuation in private markets as its sales exploded. Then tobacco giant Altria — which owns storied cigarette brand Marlboro among many others — made Juul Labs an offer; $12.8bn for a 35% stake, valuing Juul at $38bn, and making it one of the most valuable startups, or even private companies, in the US.
At the time Altria's offer probably looked half-sensible. In hindsight it might be one of the worst-timed ever. Juul's popularity, particularly with teenagers, brought a regulatory investigation almost immediately, and a ban on some of its most popular flavors swiftly followed.
