Myst Labs, a Chinese e-cigarette maker co-founded in 2019 by Chenyue Xing, a chemist who was part of the Juul Labs team that invented nicotine salts, recently raised “tens of thousands of dollars” in funding, reports TechCruch.
The news comes after Chinese policymakers published draft rules that would bring e-cigarettes under the same regulatory scope as traditional tobacco.
Such rules are likely to lead to a shakeout in China’s vapor business, leaving the industry in the hands of a few players with the resources to comply.
According to Myst Head of Marketing Fang Wang, the prospect of regulations has sparked interest among institutional investors who previously avoided the vapor sector.
The company’s recent funding round was led by Myst Labs’ existing investor, IMO Ventures. Myst declined to list its other investors but said they include high-profile individuals involved in the e-bike sharing company Lime, Facebook and the bitcoin industry.
Most of Myst’s current sales are in China, where it has opened 600 stores and plans to reach a footprint of 1,000 stores in the next quarters. Overseas, the startup has a retail footprint in Malaysia, Russia, Canada and the United Kingdom.
The new funding will allow Myst to further expand its sales network and strengthen its research and development. The company prides itself on its product containing 1.7 percent nicotine, which it claims can deliver the effect of a 3 percent counterpart. Xing is currently working on e-liquids with “natural tobacco contents” and without organic acids, additives that allow nicotine salts to vaporize and be absorbed.
While a small player compared to market leader RLX Technology, which went public in New York earlier this year and has submitted a premarket tobacco product application to the U.S. Food and Drug Administration to sell in the U.S., Myst is growing quickly.
Co-founder Thomas Yao says the company’s recent sales have been tripling every three months.
According to a 2019 article by Bloomberg, Xing grew up in Shanghai and moved to the U.S. to study. She got a Ph.D. in chemical engineering at the University of California, Davis, and worked at U.S. biotech and pharmaceutical companies, specializing in orally inhaled drugs for diseases like asthma. She joined Juul to help people stop smoking but left when the parent company expanded its focus to offer marijuana vaporizers.
Xing started Myst this year with Yao, who is also a founding partner at IMO Ventures. The firm was an early investor Lime scooters and Paytm digital wallets, among other ventures.
Myst’s employees are split between Silicon Valley, where scientists work on research, and Shenzhen, China, where the manufacturing and marketing staffs make and sell the devices.