Juul e-cigarette’s valuation has shrunk by 260 billion


On the whole, there are 586 Unicorn enterprises in the world, an increase of 92 over last year. The top three are all from China, namely ant group, byte hop and didi travel, with valuations of 1 trillion yuan, 560 billion yuan and 370 billion yuan respectively.

Of the 586 unicorns, 89 had increased in value. Among them, the payment platform Stripe was the biggest winner with an increase of 90 billion yuan. The data analysis firms Palantir and Kwai’s 80 billion yuan and 75 billion yuan added value respectively became second and more than 3 of Unicorn businesses.

If there is a winner, there will be losers. Juul labs, Wework, bitcontinental, aibiying and Shenzhou Youche have become the losers with the largest decline in valuation with the value reduction of 260 billion yuan, 190 billion yuan, 50 billion yuan, 25 billion yuan and 20 billion yuan respectively.

Juul, the biggest loser, lost 260 billion

Juul labs (hereinafter referred to as Juul), which was planning to occupy China’s e-cigarette market a year ago, would never have thought that he would lose a valuation of 260 billion yuan in just one year.

The story begins in 2007, in which Bowen, who is studying for a master’s degree at Stanford University, founded ploom, an electronic cigarette company, and sold the brand to Japan Tobacco Company eight years later, making the first pot of gold.

Then they renamed their company Pax labs and launched a USB stick shaped electronic cigarette, Juul. This only U disk size of the e-cigarette volume is not big, but the water spray is not small, and it will soon become red.

In 2017, Juul was officially separated from Pax labs and embarked on the high-speed development train, and soon became the leading e-cigarette enterprise with 75% share of the e-cigarette market in the United States.

At the end of 2018, Juul obtained a $12.8 billion investment in Altria group, the parent company of Marlboro, at the cost of 35% of the company’s shares.

After this wave of financing, Juul’s valuation directly doubled to $38 billion, and its 1500 employees received an average annual bonus of $1.3 million per person, with a total value of about $2 billion.

However, highlights come and go faster. From 0 when it was founded to 38 billion US dollars at the end of 2018, Juul only took three years, and it only took more than one year to shrink from $38 billion to $13 billion.

In 2019, when Juul, who has just reached the peak of his life, is making ambitious strides into the global market, the smoking ban comes with accusations of “electronic cigarette death” and “inducing teenagers”.

On September 9, 2019, after more than a year’s careful planning, Juul finally entered the Chinese market that he had long coveted, and launched a flagship store on tmall and Jingdong platforms respectively; but only four days later, the two online stores suddenly went offline, and after a brief re online on the 15th, they were offline again on the 16th, and their plan to enter the Chinese market was aborted.

After that, Juul had to give up many promising markets in India, Thailand, Singapore, Laos, Cambodia and South Korea because of the e-cigarette ban implemented by many countries.

In the U.S. base camp, Juul is facing the biggest crisis in history. Some products are closed, investigation and supervision continue, senior management changes frequently, and large-scale layoffs are announced many times In May 2020, it was reported that Juul planned to lay off about 900 employees. In addition to the 650 jobs already laid off by the end of 2019, Juul expected to cut about 40% of its staff.

Under the crisis, Juul’s valuation has shrunk dramatically. In October 2019, Altria announced that it would adjust Juul’s valuation to $24 billion. In December 2019, it was reported that tiger Global Fund, an early investor in Juul, also halved its valuation of Juul to $19 billion at the end of September of that year. At the end of January 2020, Altria announced again that it had written down its stake in Juul, reducing its valuation from $38 billion at the time of investment to $12 billion.

It is worth mentioning that on July 30, Juul announced that it has submitted an application to the food and Drug Administration (FDA) to continue selling e-cigarettes in the United States, which will be the key to the final fate of the once star enterprise.

Wework, the second year, fell the most unicorn

Wework and Juul are a pair of “brothers and sisters”. One occupies the first “throne” of shrinking value, and the other is the Unicorn with the largest decline.

In 2010, Adam Neumann and Miguel mckaviy, who are also interested in community building and design, sold their shares in green desk, another joint office start-up, to start Wework in New York with a $15 million financing.

At first, Wework managed only two properties. By the time Wework applied for listing in 2019, it had 528 offices and 527000 members in 111 cities in 29 countries.

During the years of Wework’s high-speed running, capital also came.

In March 2016, Lenovo holdings and Hony capital led a round of financing, and Wework’s valuation reached US $16 billion; in August 2017, Wework obtained another $4.4 billion financing jointly invested by Softbank group and Softbank vision fund, and its valuation rose to $20 billion.

In July 2018, Zhixin capital, Temasek Holdings and Softbank group led the investment of US $500 million in round B financing. In November of the same year, Wework obtained another US $3 billion of new investment from Softbank group, and the valuation rose again.

By January 2019, Wework’s valuation even peaked at $47 billion.

In just over two years, Wework’s valuation soared by more than $30 billion, or 193.7%. But it took just six weeks to transform itself from America’s most valuable technology company into “worthless.”.

On August 14, 2019, Wework submitted its IPO prospectus to the securities and Exchange Commission of the United States, with a plan to raise $3.5 billion. It was supposed to be the plot of “another story”, but unexpectedly, it was self defeating and became the Waterloo event from prosperity to decline.

With the disclosure of the prospectus, Wework’s mysterious veil has been uncovered, and many problems hidden under the veil have also been exposed.

Data shows that from 2016 to 2018, Wework’s revenue was $436 million, US $886 million and US $1.821 billion respectively, showing a high revenue growth rate. However, the rapid growth of revenue is at the cost of constant burning money. From 2016 to 2018, Wework’s net loss expanded from $429 million to $1.927 billion, even exceeding the total revenue.

Wework then fell into a series of crises, such as the valuation and business model being questioned by investors, the founder’s resignation, the company’s assets cashing out, and the institutional divestment. As the valuation fell, the listing plan had to end with withdrawal of the prospectus and grounding of the IPO plan.

In addition, it is worth mentioning that bitcontinental, aibiying and Shenzhou Youche are the “worst unicorn” after Juul and Wework. Among them, bitcontinental became the third highest enterprise in valuation shrinkage with 50 billion yuan of shrinkage and 62.5% of decline, while Shenzhou Youche ranked fifth and fourth with a decrease of 20 billion yuan and 50% respectively, while aibiying ranked fourth and fifth with a decrease of 25 billion yuan and 9.26% respectively.



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