Juul inventor’s Myst lands funding as institutional investors turn to China’s e-cigs

Over the past few years, institutional investors have largely avoided Chinese e-cigarette makers, which have been flooded with crude workshops and lacked regulatory oversight. But as China launches the strictest regulations on e-cigarettes to date, investor attitudes are changing.

Myst Labs is a Chinese e-cigarette maker co-founded in 2019 by chemist Chenyue Xing, who was part of Juul’s team. Invented nicotine salt, A key element of vaping, recently raised “tens of thousands of dollars” from a Series B funding round. Financing was led by an existing investor, IMO Ventures. Thomas Yao, CEO and co-founder of Myst, is a founding partner of IMO Ventures.

March, one of China’s top technology policy makers Release A series of draft rules that put e-cigarettes within the same regulatory scope as traditional cigarettes. This means that steam-breathing companies will need licenses to produce, wholesale and retail the world’s largest e-cigarette manufacturers and exporters.

Fang Wang, head of marketing at Myst, told TechCrunch that these changes would hurt small producers with poor quality control and leave a small number of established and compliant players in the industry.

For one thing, standardizing production is costly, Lee said. From ceramic coils, batteries to fragrances, all components and components of the arc must meet stringent requirements. E-cigarette companies also have to pay tobacco tax, which is an important source of tax revenue for the Chinese government.

Another challenge is how to reduce the nicotine content. Many of the current products on the market have relatively high nicotine levels of 3-5%, so if China complies with European Union standards. 1.7%Lee suggested that many small brands would be forced out of business due to lack of know-how to produce low-nicotine arcs that satisfy users’ desires.

“It has attracted the attention of many investors in the past few months. Prior to that, professional institutional investors often avoided e-cigarette companies, but as regulations materialized, they are now more It’s becoming more aggressive, “Lee added.

Myst refused to list other investors, but said it included celebrities from the e-bike sharing company Lime, Facebook and the Bitcoin industry.

Most of Myst’s current sales come from China, with 600 stores open and expected to reach a footprint of 1,000 stores in the coming quarters. Overseas, the startup has retail stores in Malaysia, Russia, Canada and the United Kingdom and sells in over 30 shopping centers and several hospitals through its distribution partner Ecigwizard.

With the new funding, Myst will be able to further expand its sales network and enhance its research and development. The company takes pride in products that contain 1.7% nicotine and claims to be as effective as 3%. In her lab, Xing is currently working on an additive-free electronic liquid that contains “natural tobacco content” and vaporizes and absorbs organic acids and nicotine salts.

Myst is still a relatively small player when compared to Chinese market ruler Relx, which unveiled in New York earlier this year. Apply for a license to sell in the United States However, Yao is optimistic about the future of Mist. Vaping is one of the fastest growing consumer categories in China, he said. Myst’s recent sales have tripled every three months.

“In other consumer sectors, top players rarely make up 60-70% of the market, so there’s still plenty of room for the top 10 players to grow,” said the CEO.