Snowplus has raised $125 million in funding from a number of global investors to fund its expansion into overseas markets, the e-cigarette startup said in a statement on Thursday.
Why it matters: The Beijing-based company showed promise in China’s competitive vaping market, but had reportedly fallen onto hard times due to strict regulation further exacerbated by the Covid-19 outbreak in the country.
- Thousands of e-cigarette startups have sprung up in China in the last few years. They are trying to grab a share of China’s massive market of 300 million smokers.
- New regulation has increased taxes for e-cigarette companies and banned online sales. The rule against selling online made it hard for them to reach customers in recent weeks as most of the population remained locked indoors during the Covid-19 epidemic.
Details: The $125 million investment was a global fundraise including investors in Asia, the Middle East, North America, and Europe, according to the statement.
- Snowplus named one investor, Hong Kong Rothsfortune Investment Management, which was founded in 2018, as participating in the round.
- The new capital will go towards its expansion overseas. It has been building teams in the UK, Canada, and the Middle East.
- The startup said it had to “make adjustments” in its operations at home in China to propel its international expansion.
“Snowplus has been making adjustments to our business as we continue to expand overseas.”—Derek Li, co-founder and head of international business at Snowplus
Context: A former employee at Snowplus told TechNode that the startup had fired 50% of its staff beginning in November due to liquidity issues. The company was already in trouble and the Covid-19 outbreak only made things worse, the person said.
- Snowplus’s Series A was the biggest investment in a Chinese vaping startup, led by prominent tech venture capital firms Sequoia Capital China and ZhenFund.