Juul Soars Despite Investor Discomfort With E-Cigarettes

One of the most valuable consumer products startups in the U.S.—Juul Labs—is a company some investors won’t even touch.

Still, enough institutional investors have been impressed by its growth that they agreed to buy shares in the electronic cigarette maker from early shareholders on the secondary market, propelling its valuation above $10 billion in the last month, according to three people familiar with the matter. That is an eye-popping sum for a company many early stage investors refused to put money into due to policies at their firms against investments in marijuana startups, firearms makers and other controversial businesses. Regulation also could jeopardize its growth.