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Illustration: Lazaro Gamio/Axios

Juul, the maker of vaping devices and nicotine flavor pods that dominate college and (yes) high school campuses, is raising $1.2 billion at a valuation of around $15 billion.

Bloomberg was first with the news on Friday, and Axios has learned that it's basically a done deal that could be announced within just a week or two. We've also obtained some company financials, which helps explain the investor appeal.

The following numbers come from late last year, and word is that Juul is blasting through its 2018 projections:

  • 2017 revenue was around $245 million, with a 54/46 split between product (devices) and subscription (pods). This is up from around $60 million in 2016, and projected 2018 revenue was $940 million.
  • Gross margins are 70%
  • 2018 EBITDA projection is approximately $250 million.

Such numbers would normally make Juul a no-brainer for venture capital and growth equity types, particularly given that the San Francisco-based company hasn't yet tapped overseas markets other than Israel. But this one is complicated:

  • Ethical con: Juul contains a ton of nicotine. Specifically, each Juul pod is the nicotine equivalent of an entire pack of regular cigarettes. This can make it very addictive, and also may create cardiovascular issues for older users and brain development issues for younger ones. Moreover, there has been academic research showing that young people using e-cigs are more likely to begin smoking regular cigarettes than are those who don't use e-cigs. That research isn't specific to Juul, but Juul's design and flavoring makes it the e-cig of choice for those who aren't legally allowed to have them.
  • Ethical pro: Juul is used by some regular cigarette smokers as a cessation tool, and there is some Juul-funded research that points to its efficacy. It also has taken steps to reduce its visibility among young people, including via social media, and says it has online ordering limits to prevent black market sales to underage users.

Bottom line: As we said, this deal is getting done because the growth almost demands it. But don't be surprised if it doesn't include traditional VC or growth equity investors.

  • Some funds are knocked out because of tobacco restrictions, while others won't think the possible risks — both ethical and regulatory — are worth the reward at such a high valuation.
  • I don't have any inside info on the actual investors, but would guess there would be some non-U.S. names (particularly because of the int'l expansion plans). Also could be interesting to see if TPG becomes involved, given that Juul CEO Kevin Burns is a former TPG exec who previously helped lead portfolio company Chobani.

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  1. Health: The good and bad news about antibody therapies — Fauci: Hotspots have materialized across "the entire country."
  2. World: Belgium imposes lockdown, citing "health emergency" due to influx of cases.
  3. Economy: Conference Board predicts economy won’t fully recover until late 2021.
  4. Education: Surge threatens to shut classrooms down again.
  5. Technology: The pandemic isn't slowing tech.
  6. Travel: CDC replaces COVID-19 cruise ban with less restrictive "conditional sailing order."
  7. Sports: High school football's pandemic struggles.
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Dan Primack, author of Pro Rata
Updated 7 hours ago - Economy & Business

Dunkin' Brands agrees to $11B Inspire Brands sale

Photo: Alexi Rosenfeld/Getty Images

Dunkin' Brands, operator of both Dunkin' Donuts and Baskin-Robbins, agreed on Friday to be taken private for nearly $11.3 billion, including debt, by Inspire Brands, a restaurant platform sponsored by private equity firm Roark Capital.

Why it matters: Buying Dunkin’ will more than double Inspire’s footprint, making it one of the biggest restaurant deals in the past 10 years. This could ultimately set up an IPO for Inspire, which already owns Arby's, Jimmy John's and Buffalo Wild Wings.

Ina Fried, author of Login
9 hours ago - Technology

Federal judge halts Trump administration limit on TikTok

Illustration: Aïda Amer/Axios

A federal judge on Friday issued an injunction preventing the Trump administration from imposing limits on the distribution of TikTok, Bloomberg reports. The injunction request came as part of a suit brought by creators who make a living on the video service.

Why it matters: The administration has been seeking to force a sale of, or block, the Chinese-owned service. It also moved to ban the service from operating in the U.S. as of Nov. 12, a move which was put on hold by Friday's injunction.