Investment in NJOY Indicates E-Cig Category 'Paradigm Shift'
Electronic cigarette maker receives $75 million in funding from Parker, Teitelbaum
SCOTTSDALE, Ariz. -- Sean Parker, founder of the Napster and a co-developer of Facebook, and Douglas Teitelbaum, principal of merchant bank Homewood Capital, have invested $75 million in electronic cigarette brand NJOY, said NJOY CEO Craig Weiss. Teitelbaum will join NJOY's board of directors.
The company will use the funding for marketing, clinical trials, research and development and international expansion.
"These individuals are among the world's leaders in identifying paradigm-shifting consumer technology investment opportunities, and their investment represents confidence in NJOY's model," Weiss said. "The successful completion of this capital raise underscores the growth potential for NJOY as it continues to lead the electronic cigarette market, and our ongoing confidence in the huge promise of our business."
Teitelbaum said, "The electronic cigarette category, and NJOY in particular, show great potential. After lengthy study, Sean and I are convinced that NJOY will continue to innovate and lead the smoker away from all the negatives of combustion with their smoker familiar product. As a former smoker, and after trialing many products in search of a compelling alternative to cigarettes, I found the NJOY King to be in a league of its own in terms of flavor, brand, and product experience. There are 46 million US smokers, most all of whom are, for a variety of reasons, interested in an alternative to cigarettes that will provide the same flavor and brand reliability. NJOY's standards firmly establish their leadership role in guiding the smoker towards a better future. We are honored to put the capital behind this worthwhile effort."
Added Parker, "As an entrepreneur and investor, I'm drawn to disruptive companies in explosive new markets. The common thread between these companies is a missionary desire to leverage technology to change the world. I'm optimistic that the clever application of technology might someday obsolete the combustion cigarette and all the harm it causes. Solving this problem takes a world-class leadership team that brings together executives across a range of disciplines from electrical engineering, to chemistry, to consumer marketing. The proof is in the pudding: NJOY's King product has succeeded in capturing a market leadership position. Like every great technology company, NJOY has demonstrated a willingness to constantly iterate and reinvent itself. The result of this investment in innovation has been the most satisfying alternative ever created to combustion cigarettes. We are excited to be an investor in this company and to participate in the massive growth of this segment."
Parker is an entrepreneur with a record of launching genre-defining companies that reinvent ways to spread information online. In 1999, at the age of 19, he co-founded Napster and changed how people think about and share music. Two years later, he co-founded Plaxo, pioneering viral engineering technology for updating contact information. Parker served as Plaxo's president until 2004, when he joined with Mark Zuckerberg to develop the online social network Facebook. He was Facebook's founding president. In 2007, Parker co-founded Causes, which promotes online philanthropy. In 2010, he led the first U.S. investment in Spotify, the revolutionary cloud music service, where he continues to serve as a director.
Homewood Capital is a New York City-based merchant bank founded by Teitelbaum, former managing principal of Bay Harbour Management LC, which has created value across a variety of industries including the early identification of the change in value of wireless spectrum with the move to mobile data, to the founding capital behind NextG Networks, the growth of Barneys New York, Telcove Inc., the Planet Hollywood Casino in Las Vegas, and Total Outdoor.
NJOY is available in more than 60,000 retail stores nationwide, including 24 of the nation's top 25 convenience store chains. NJOY offers a variety of rechargeable and nonrechargeable e-cigarette products made for adult smokers. These products provide nicotine and tobacco and menthol flavor without smoke or odor. The company is based in Scottsdale, Ariz.