36Kr Exclusive: Vaping Brand KMOSE Secures Another RMB 30 Million in Series A Funding

36Kr has learned that KMOSE recently secured RMB 30 million in Series A financing, with Yanshi Capital as the investor. Yanshi Capital is a PE firm focused on mid- to late-stage projects, and this investment in KMOSE represents an extension of its presence into earlier-stage sectors. The new funding will be mainly used for brand building and channel development. Earlier this August, KMOSE had just completed an angel round worth tens of millions of yuan.

36Kr has previously reported on KMOSE. Founded in March 2019, the company has launched two product lines: the K1 disposable e-cigarette and the KMOSE PRO pod-based vaping device. Sales began earlier this year, with first-month revenue reaching RMB 3 million. From May to September, monthly sales posted an average growth rate of around 30%. KMOSE PRO was only launched this September.

Leading brands such as RELX have already emerged in the vaping industry, but the sector’s rapid growth continues to create opportunities for new brands. In 2018, China’s overall vaping market was valued at US$560 million, with a six-year CAGR as high as 68%. In terms of user penetration, vaping in China has reached only 1% of the country’s 350 million smokers, far below the 13% penetration rate in the U.S. market. With high growth combined with low penetration, China’s vaping market still has ample room for development.

From the very beginning, KMOSE made it clear that it wanted to build a vaping brand. Its product positioning centers on being youthful, stylish, minimalist, and premium, with urban young consumers as its core audience. In product design, K1 was launched first to build brand awareness and attract loyal users, followed by the PRO pod-based product to meet users’ needs across multiple dimensions. K1 comes in 12 carefully selected colorways, each corresponding to a different flavor; PRO is available in 3 colors corresponding to 6 flavors, giving users as much novelty as possible.

As an upgraded product, KMOSE PRO pursues “high quality” in both appearance and internal structure. The body uses aviation-grade aluminum alloy with an Apple-style zircon sand finish, while the internal structure emphasizes leak prevention and uses a ceramic atomizer core to enhance the vaping experience. In addition, KMOSE PRO uses technology to achieve a consistent taste across different nicotine strengths. Of the six e-liquid flavors for PRO, two have a nicotine concentration of only 1.8% (while the others are in the 3%–5% range), yet the lower nicotine level does not affect flavor performance. In the future, KMOSE plans to consider lowering the nicotine concentration across all products to reduce potential harm to health.

KMOSE defines e-cigarettes as fast-moving consumer goods and emphasizes value for money. A single K1 is priced at RMB 45, while PRO is priced at RMB 269.

Product is a key part of brand building, but channels are equally important. Online, KMOSE sells through JD.com, Taobao, and Youzan. Offline, KMOSE emphasizes being “visible everywhere and available everywhere.” According to KMOSE co-founder Liu Haonan, as an instant-consumption product, e-cigarettes should be easily found in everyday spaces including convenience stores and cafés. Based on this philosophy, while cooperating with “city partners,” or regional distributors, KMOSE has also built its own channel team to develop offline channels independently and then pass them on to distributors.

At present, KMOSE has established an offline presence in more than 30 cities nationwide and has partnered with over 40 well-known domestic convenience store chains, including exclusive KA channel partnerships, covering more than 8,000 retail points. In Xiamen alone, it has more than 600 offline sales outlets across KA channels, cafés, and other scenarios. Monthly sales of the K1 product in Xiamen have already exceeded 70,000 units, with terminal sell-through reaching 1.6.

Regarding the high investment required to expand proprietary channels, Liu Haonan said that channel entry fees vary depending on factors such as store count, and the company determines reasonable channel investment based on a principle of recovering costs within six months.

With urban young consumers as its core audience, KMOSE has also built a fan culture around the brand. By sponsoring events such as electronic music festivals, it gathers users offline and then directs them online through community management. The company has already developed a standardized community operations system, continuously attracting target users through circle-based engagement and topical discussions. According to the company, sponsoring one offline event with 3,000 attendees can bring in more than 6,000 additional community users through effective social sharing and viral growth tactics.

The founding members of KMOSE were all born in the 1990s, giving them a stronger ability to approach product development from the perspective of young consumers. The team has extensive experience and has managed projects in the internet, FMCG, and media sectors.

Going forward, KMOSE will continue developing new products. While expanding in the domestic market, it will also consider entering overseas markets such as Europe, the United States, and Southeast Asia.