Founders of ‘phenomenon’ Juul are worth $843M apiece
They are ‘the brand to beat’ as $15B e-cigarette maker continues dominance in market
Adam Bowen and James Monsees were pursuing master’s degrees in product design at Stanford when they decided to do something about their smoking addictions.
That was the beginning of what eventually would become Juul Labs Inc., now a $15 billion (U.S.) e-cigarette maker with a product so popular it’s used as a verb.
“They’re becoming synonymous with the e-cigarette market,” Bloomberg Intelligence analyst Ken Shea said of San Francisco-based Juul. “They’re a phenomenon of a company.”
Bowen, 43, and Monsees, 38, founded Ploom in 2007, sold the name eight years later to Japan Tobacco Inc. and renamed their company Pax Labs Inc. Around the same time, the pair introduced a USB-shaped e-cigarette and called it the Juul. Last year, Juul was spun out from Pax and has gone on to swallow the market.
Its growth has been meteoric, with Juul’s dollar share of ecigarette sales soaring to 53 per cent from 16 per cent at the end of 2017, according to data from market researcher IRI. Reynolds American Inc.’s Vuse Ciro is next biggest with just 10 per cent, down from 22 per cent at the end of last year. Bowen and Monsees came up with their big idea while taking a smoke break one night in 2004 as they faced a deadline on their thesis proposals for their master’s degrees in product design, according to a 2012 profile in Stanford Magazine.
The men, who declined to comment for this story, each owned 5.6 per cent of Juul after a July funding round that gives them stakes worth $843 million apiece.
That figure is poised to grow along with e-cigarette sales, which have almost tripled in the past year.
While e-cigs comprise just 3 per cent of tobacco-industry sales today, Shea said he expects it will be as much as 25 per cent within a decade.
Wells Fargo & Co. analyst Bonnie Herzog, who called Juul the “brand to beat,” led a survey that found it’s attracting new tobacco users rather than luring them from traditional cigarettes and other e-cigarette brands. Juul’s stated mission is to help adults quit smoking cigarettes.
It’s hard to say why Juul has become so popular when e-cigarettes have been around for more than a decade.
“Some products just go viral,” Shea said, citing the Cabbage Patch Kids craze of the 1980s as an example. But dolls aren’t addictive. Most of Juul’s single pods contain the same amount of nicotine as a pack of cigarettes. That’s one of the highest levels of nicotine content in the U.S. e-cigarette market, according to the Centers for Disease Control and Prevention.