Parent of Israel’s Il Makiage debuts on Nasdaq at $2 billion valuation

L Catterton-backed beauty and wellness company Oddity, which harnesses AI to develop cosmetics, raises $423 million from initial public offering

Sharon Wrobel is a tech reporter for The Times of Israel.

Oddity, parent company of cosmetics brand Il Makiage debuts on Nasdaq, July 19, 2023. (Courtesy)
Oddity, parent company of cosmetics brand Il Makiage debuts on Nasdaq, July 19, 2023. (Courtesy)

Parent company of Israeli online cosmetics brand Il Makiage raised more than $423 million in its debut on the Nasdaq on Wednesday, giving the firm a valuation of about $2 billion.

Oddity Tech backed by private equity firm L Catterton, offered 12.1 million shares at its initial public offering, up from earlier plans to sell 10.5 million shares, at an upsized price of $35 per share, and raised $423.5 million. That’s after the underwriters of the offering on Monday raised the IPO price range to $32 to $34 from $27 to $30 previously. The stock will trade on the Nasdaq under the ticker symbol “ODD.”

Founded in 2018 by Oran Holtzman and his sister Shiran Holtzman-Erel, Oddity has built an online consumer tech platform harnessing artificial intelligence and deploying algorithm models to develop cosmetics with the mission to innovate and reinvent the beauty and wellness market and help customers pick the right products, including makeup shades.

The company serves over 40 million users with its AI-driven online platform, deploying data science to identify consumer needs, and developing solutions in the form of beauty and wellness products.

Oddity, home to the Il Makiage online cosmetics brand and SpoiledChild wellness brand, operates an R&D and technology center in Tel Aviv, which makes up 40% of its 250 employees, and includes in-house engineers, data scientists, computer vision experts and product teams, many of whom were recruited from elite Israeli tech centers including the Israeli Defense Forces’ Unit 81, its Special Operations Division’s technology unit. Its business headquarters are located in New York.

Back in February 2022, Oddity launched the SpoiledChild brand, which uses a proprietary machine learning engine to pair consumers with personalized hair and skin products, formulations and shades, replacing the need to physically try on products in-store. The engine applies physics-based AI technology to analyze skin and hair features, detect facial blood flows, monitor heart-rate, and create melanin and hemoglobin maps, the company said.

In January last year, Oddity raised $130 million from a private funding round that valued the company at $1.5 billion. The investment was led by Thomas Tull, Franklin Templeton, Fidelity Management & Research Company LLC and First Light Capital Group.

As of March 31, 2023, Oddity had over four million active customers, or customers that made at least one purchase within the last 12 months. In the three months ended March 31, the company generated net income of $19.6 million on revenue of $165.7 million. During the full-year of 2022, it generated net income of $21.7 million versus $13.9 million in the year earlier on net revenue of $324.5 million compared to $222.6 million in 2021.

In April 2023, Oddity bought Boston-based biotech startup Revela for $76 million and launched Oddity Labs to focus on AI-based discovery of new molecules to develop beauty and wellness products.

“We believe AI-based molecule discovery is a transformative frontier in product development, driven by the advancements of key enabling technologies, including synthetic biology, genomic sequencing, robotics and AI, that can support the discovery and development of molecules at speed and scale,” the company said.

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