The Rise and Fall of Juul: Once a Silicon Valley Darling, Now Banned by FDA

Juul is an electronic cigarette company that spun out of Pax Lab in 2015. The start-up quickly becomes a Silicon Valley star with a $38 billion valuation. But, it went through several rebrands, investigations, and valuation slashes over time. Scroll down to see the rise and fall of Juul. 

What Happened? 

In 2018, Juul was everywhere in the US, from college campuses to middle school restrooms. So, ironically, Marlboro’s parent company Altria paid up $12.8 billion that year for 35% of the e-cig pioneer and Silicon Valley darling, notching it a $38B valuation.

Amidst the success, something else happened with Juul. Several outlets reported a Juul epidemic happening in American schools, urging the FDA to take action, such as: 

• Coordinating a massive effort prohibiting retailers from selling Juuls to minors.
• Investigating Juul’s marketing to minors (e.g., its sweet-tooth flavors like mango and crème brûlée).

In June, the FDA banned Juul from selling its products in the US and ordered the company to remove its existing supplies from the market. The ban resulted in the sudden plunge of Juul’s current  value at only $1.3 billion 

Altria’s Stake in Juul

As per the Wall Street Journal, Altria’s stake in Juul has plummeted by 97 percent. There’s one silver lining, though. Altria can now scrap its noncompete agreement with Juul and launch its own e-cigs to market.

The Rise and Fall of Juul 

Below is the timeline of Juul, from skyrocketing popularity to company challenges and FDA ban. 

2004

• James Monsees and Adam Bowen, Stanford product design graduate students, create the idea for Juul’s predecessor Ploom. 

2007

• Monsees and Bowen established the vaporizer startup Ploom in San Francisco.

2008

• In February 2008, Ploom raised $900,000 in venture funding, putting its valuation at roughly $3 million.

2013

• On August 1, Ploom debuted the Pax with a launch party in SFO. During this period, Ploom investors included Japan Tobacco, the maker of Winston and Salem cigarettes, the software company Originate, and the angel investment group Sand Hill.

2015

• On February 16, Monsees and Bowen sold the Ploom brand and a vaporizer line to the Japanese tobacco company JTI. They rebranded as Pax Labs.
• On June 1, Pax announced the creation of Juul with a launch party in New York City.

2016

• Juul sales skyrocketed by 700%.

2017

• Juul Labs spun out as an independent company and named former Pax Labs CEO Tyler Goldman CEO.
• Juul became the best-selling e-cigarette on the market and sold 1 million units. According to Nielsen data, the startup also captured a third of the e-cigarette market. 

Source: Pax Labs

2018

• Dozens of media outlets report that using Juul is an epidemic in high schools.
• Spearheaded by Commissioner Scott Gottlieb, the US Food and Drug Administration started an ‘undercover assignment’ to investigate sales of the Juul to minors.

Source: Business Insider

• In June 2018, San Francisco banned flavored e-cigs like the Juul, prompting an endorsement from former New York City Mayor Michael Bloomberg. 
• Israel banned Juul products on August 21, 2018 due to “grave risk to public health” because of high nicotine content.
• The FDA conducted a surprise inspection at Juul headquarters and seized some documents as part of an investigation into its marketing practices. 
• On November 13, 2018, the company stopped selling its sweet and fruity flavors at stores, making them only available online.
• Altria bought 35% of Juul for $12.8 billion on December 20, 2018, bumping Juul’s valuation to $38 billion. 

2019

• Juul’s CEO apologized to parents of teens addicted to its vaping products. Also, the company pulled out some flavors during the succeeding months of 2019.

2020

• Amid the pandemic, Juul lays off 40% of its workforce in April, 2020. It then laid off more than half of its remaining staff, resulting in about a further 1,000 employees being dismissed. 

2021

• Altria slashes its valuation for Juul to $5 billion. Meanwhile, Juul asserts it was worth $10 billion.

2022

• The FDA banned Juul from selling and distributing its e-cigarette products in the US. The agency also ordered that all products currently on the market be removed.