{"id":36967,"date":"2023-07-17T20:01:57","date_gmt":"2023-07-18T00:01:57","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/il-makiage-parent-oddity-tech-is-going-public-5-things-to-know-about-the-israeli-digital-beauty-company\/"},"modified":"2023-07-17T20:01:59","modified_gmt":"2023-07-18T00:01:59","slug":"il-makiage-parent-oddity-tech-is-going-public-5-things-to-know-about-the-israeli-digital-beauty-company","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=36967","title":{"rendered":"Il Makiage parent Oddity Tech is going public: 5 things to know about the Israeli digital beauty company"},"content":{"rendered":"

Oddity Tech,\u00a0an Israeli consumer tech platform for the beauty and wellness market,\u00a0is going public this week in a deal that appears to be gaining traction.<\/p>\n

The underwriters raised the proposed price range on Monday to $32 to $34 from $27 to $30 previously, a sign of solid demand from investors. <\/p>\n

\n

The company
\n ODD,
\n <\/bg-quote>
\n is planning to offer 10.5 million shares and would raise $357 million at the top of that range at a valuation of $1.9 billion. Goldman Sachs, Morgan Stanley and Allen & Co. are lead underwriters in a team of eight banks working on the deal. <\/p>\n

Proceeds will be used for working capital and for developing new brands and other general corporate purposes. The company has applied to list on Nasdaq, under the ticker ODD.<\/p>\n

The company, which was founded by an Israeli sister-brother team, is confident its high-tech approach to the beauty business gives it a strong advantage in an industry worth an estimated $600 billion that is still dominated by brick-and-mortar retailers.<\/p>\n

\u201cWe believe this market is ripe for disruption, dominated by established, largely offline, wholesale models that we feel have not sufficiently evolved to meet changing consumer preferences for a digital, personalized, and customized experience,\u201d says the prospectus.<\/p>\n

The company, led by its first brand Il Makiage which was launched in 2018, was the fastest-growing global beauty direct-to-consumer platform from 2020 through 2022, says the prospectus, citing trade magazine Women\u2019s Wear Daily. <\/p>\n

Il Makiage was also the fastest-growing digital, direct-to-consumer beauty brand in the U.S. through 2021, says the IPO prospectus, citing data from Digital Commerce 360, which is its most recent available.<\/p>\n

The second brand, SpoiledChild, launched in 2022 with the goal of disrupting the wellness category online, and is scaling even faster, says the prospectus. <\/p>\n

The company now has more than 40 million users on the platform that have generated more than 1 billion data points on their beauty preferences. As of end-March, Oddity had more 4 million active customers, or customers that had made at least one purchase in the last year. <\/p>\n

Renaissance Capital, a provider of IPO exchange-traded funds and institutional research, notes that recent consumer deals have fared well, led by Cava Group Inc.,\u00a0the Mediterranean-style restaurant chain that went public in mid-June at $22 a share and was last trading at $47.06.<\/p>\n

For more:<\/strong>\u00a0Cava Group CFO is confident restaurant chain will be profitable\u2014but she won\u2019t say when<\/p>\n

See also:<\/strong> Like choosy shoppers at a retail store, IPO investors are demanding discounts and displaying price sensitivity<\/p>\n

\u201cOddity has both impressive growth and margins thanks to youth-oriented marketing,\u201d said Bill Smith, Renaissance co-founder and chief executive in commentary.<\/p>\n

Still, \u201clonger-term, that viral growth is often a double-edged sword, and reliance on trendy branding can quickly become a liability,\u2019 he added.<\/p>\n

Here are five things to know about Oddity ahead of its IPO:<\/p>\n

Oddity is profitable and showing growth<\/h2>\n

Unlike other recent IPOs, including Cava Group, Oddity is profitable, chalking up net income of $19.6 million in the quarter through March 31, up from $3.0 million in the year-earlier period. <\/p>\n

Revenue rose to $165.7 million from $90.4 million. <\/p>\n

The company is expecting a \u201cmeaningful\u2019 portion of its future revenue will stem from future brand launches \u201cthat will seek to disrupt markets in the beauty and wellness space that have been historically underpenetrated online.\u201d<\/p>\n

Oddity is serious about technology. Very serious.<\/h2>\n

Oddity prides itself on what it calls its \u201coutsider\u201d approach: \u201cWe are a technology company seeking to reinvent every aspect of a massive industry,\u201d says the prospectus.<\/p>\n

Consequently, its tech team is the biggest at the company and accounts for more than 40% of its total headcount. The company invests heavily in data science, machine learning and computer vision \u2014 and it takes finding that talent seriously.<\/p>\n

\u201cWe take enormous pride in our tech team. We recruit from the most attractive pockets of talent in the world, and our tech team receives focus from the highest levels of leadership in our organization,\u201d says the prospectus.<\/p>\n

From its Tel Aviv base, its R&D organization has attracted talent from elite Israeli technology centers including the Israeli Defense Forces\u2019 Unit 81, its Special Operations Division\u2019s technology unit.<\/p>\n

That also means one rather unusual risk factor. \u201cOur operations may be disrupted by the obligations of our personnel to perform military service,\u201d says the prospectus. <\/p>\n

Oddity uses A.I. \u2014 because of course it does<\/h2>\n

Oddity uses artificial intelligence to help consumers identify the correct products, formulations and shades, eliminating the need for them to go to a physical store and test samples. Its patented software allows smartphone cameras to provide hyperspectral information \u2014 which can otherwise only be obtained using expensive equipment costing $20,000 or more, says the prospectus. <\/p>\n

\u201cBy applying unique, physics-based AI technology to recover and interpret this hyperspectral information, we can analyze skin and hair features, detect facial blood flows, monitor heart-rate, and create melanin and hemoglobin maps,\u201d it says.<\/p>\n

The beauty editors at the magazine Cosmopolitan are impressed, according to an article published in February. The editors tested the Il Makiage foundation called Woke Up Like This, which comes in 50 shades. The correct shade is determined by the company based on a quiz, which covers such issues as skin type, application and tone.<\/p>\n

Can a foundation seen only through a screen really live up to such high expectations? the editors asked.<\/p>\n

\u201cAccording to the 469,000 people who have left an independent 5 star review, yes. Not only do thousands of make-up wearers sing the foundation\u2019s praises, but it\u2019s also the most-reviewed product in the U.S.\u2014no big deal,\u201d they wrote. <\/p>\n

It has a dual class structure<\/h2>\n

Oddity has a dual class structure with Class A and Class B shares with different voting rights. The Class A shares carry one voting right, while the Class B shares have 10 voting rights. <\/p>\n

Co-Founder and Chief Executive Oran Holtzman will own about 76.9% of the voting power once the deal is completed, meaning ordinary shareholders will have little say in how the company is run.<\/p>\n

Holtzman, and his sister and co-Founder Shiran Holtzman-Erel, who is chief product officer, are viewed as key employees and the possibility that they would leave the company is listed as a risk factor.<\/p>\n

It has no plans to pay dividends<\/h2>\n

Like many young companies, Oddity has no immediate plans to offer dividends. That means any value from the stock will have to come from price gains. <\/p>\n

The Renaissance IPO ETF
\n IPO,
\n +1.89%<\/bg-quote>
\n has gained 41.4% in the year to date, while the S&P 500
\n SPX,
\n +0.39%<\/bg-quote>
\n has gained 17%. <\/p>\n

See:<\/strong> Money-losing food chain Cava showed IPO success. Is it finally time for some tech deals?<\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Oddity Tech,\u00a0an Israeli consumer tech platform for the beauty and wellness market,\u00a0is going public this week in a deal that appears to be gaining traction. The underwriters raised the proposed price range on Monday to $32 to $34 from $27 to $30 previously, a sign of solid demand from investors. The company ODD, is planning […]<\/p>\n","protected":false},"author":1,"featured_media":36968,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-36967","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nIl Makiage parent Oddity Tech is going public: 5 things to know about the Israeli digital beauty company | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Oddity Tech,\u00a0an Israeli consumer tech platform for the beauty and wellness market,\u00a0is going public this week in a deal that appears to be gaining\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=36967\" \/>\n<meta property=\"og:locale\" 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