Huoqi Seeks 3 Billion Yuan Valuation as Third-Party Financing Begins

Recently, Boton Huashang held its 2019 annual shareholders’ meeting. According to a person who attended, shareholders including Boton Group have raised their valuation expectations for Huoqi to RMB 3 billion and are in talks with several well-known U.S. capital institutions, including some that have previously invested in Cisco, Oracle, and Alibaba.

Building a “Chinese Version of JUUL”

In recent years, vaping has developed rapidly and remained highly popular. As the industry becomes more mature, it is also expected to face tighter regulation and market reshuffling. According to insiders, at the shareholders’ meeting, Boton Group Chairman Wang Mingfan expressed satisfaction with Huoqi’s development and market performance, and stated that he is willing to continue increasing investment in both funding and channel development to turn Huoqi into an even stronger company.

Some industry insiders say Boton’s move is intended to build Huoqi into a “Chinese version of JUUL.”
  Left: Huoqi Chairman Fan Jingyu; Center: Boton Chairman Wang Mingfan; Right: Huoqi General Manager Ma Jing
JUUL is regarded by many in the industry as a groundbreaking vaping product. As a leading product in the U.S. vaping market, it was valued at US$38 billion and held 30% of the U.S. vaping market, making it a truly phenomenal blockbuster product.

Looking at Huoqi’s performance in recent years, its new products achieved the impressive result of “200,000 device kits and 3 million pods in a single month” within just three months of launch. In only 256 hours, it recruited a total of 31 provincial-level distributors across China and Southeast Asia, covering 26 provinces and cities including Taiwan, as well as four Southeast Asian countries.
 
Whether in terms of the product itself or its market performance, Huoqi appears to have the potential ingredients of a blockbuster hit. With support from Boton Group—the only one of two flavor suppliers to China Tobacco Group—Huoqi becoming a “Chinese version of JUUL” is not out of the question.

Major U.S. Capital Players Eye Huoqi Vape

What is even more noteworthy, however, is the post-meeting rumor that shareholders have raised Huoqi’s valuation expectations to RMB 3 billion and are in talks with several well-known U.S. capital institutions, including famous firms that have invested in Cisco, Oracle, and Alibaba.
 
In 2019, financing activity in the vaping industry surged. People previously involved in the mobile phone and internet sectors entered the market one after another, and internet celebrities such as Luo Yonghao also began stepping into the vaping industry. Some joked: “RMB 5 million is enough to create a vape brand, and RMB 50 million gets you straight into the finals.”

Huoqi Vape was established two years ago and is now reportedly seeking a valuation of RMB 3 billion. There are also rumors that third-party financing is about to begin, with major U.S. capital expected to enter. It is not hard to see that more and more investors are entering—or preparing to enter—the vaping track, and Huoqi, which is about to obtain a new round of financing, will gain additional advantages in this intensely competitive vaping market.
 
According to sources in investment circles and the vaping industry, in Huoqi’s upcoming third-party financing round, several well-known investment firms hope to lead the deal, though the exact financing amount has not been disclosed.

In a vaping market where capital has long been waiting in the wings, the second half is bound to be another fierce battle. Whoever wins favor from both capital and the market first will hold the greater voice.