E-cigarette startup Juul raises $650 million in funding, at $15 billion valuation

E-cigarette maker Juul Labs Inc. has raised $650 million as part of a fundraising round that values the fast-growing but controversial startup at about $15 billion, according to people familiar with the matter.

The investment is part of a financing round that seeks to raise $1.25 billion for the San Francisco company, according to a filing Tuesday with the Securities & Exchange Commission. Hedge fund Tiger Global Management is investing $600 million, the people said.

Even for fast-moving Silicon Valley, Juul has grown at an astounding pace to become the sixth-most valuable U.S. startup behind companies like Uber Technologies Inc. and Airbnb Inc. Its price per share in the current fundraising round is 56 times the 2015 price, according to a Juul filing in Delaware provided by Lagniappe Labs, a research company. That implies Juul’s valuation was less than $300 million in 2015.

The Juul device, which resembles a USB flash drive, delivers a powerful dose of nicotine in a salt solution that smokers say closely mimics the feeling of inhaling cigarettes. The Juul liquid’s 5% nicotine concentration is higher than most other commercially available e-cigarettes. Juul flavors include “Creme Brulee” and “Fruit Medley,” which critics have said make it more attractive to minors.

An expanded version of this report appears on WSJ.com.

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