Beauty and tech company Oddity, which manages Il Makiage and Spoiled Child brands, filed to go public Friday as the once-frozen IPO market heats up.
The Israel-based company plans to trade on the Nasdaq using the ticker ODD. The company did not immediately disclose how the offering would be priced in regulatory filings and declined comment when asked when the numbers would be released.
Launched in 2018 by brother and sister Oran Holtzman and Shiran Holtzman-Erel, Oddity uses data and AI to develop brands and tailor product recommendations for customers.
In the three months ended March 31, the company posted revenue of $165.65 million, up from $90.41 million in the same period a year ago. It reported net income of $19.59 million, or $5.34 per share, compared to $3.01 million, or 82 cents per share, a year earlier.
Figures revealed in the regulatory filing show that the direct-to-consumer retailer has been profitable on an annualized basis since at least 2020.
In fiscal year 2022, Oddity brought in $324.52 million in sales and saw net income of $21.73 million, or $5.94 per share. In the prior year, the retailer posted sales of $222.56 million and net income of $13.92 million, or $4.01 per share.
In 2020, it saw revenue of $110.64 million and net income of $11.71 million, or $3.45 per share.
During an interview earlier this year, the company’s global chief financial officer, Lindsay Drucker Mann, a former Goldman Sachs executive, told CNBC that Oddity is making money and growing — even in a tough macroeconomic environment that has proven increasingly risky for purely digital retailers.
At that time, Oddity shared his financial stats with CNBC. Since launching in the US, it has achieved profitability, bringing in $395 million in gross revenue and $500 million in sales by 2022, the company said.
On average, Oddity’s gross sales have doubled every year since 2018, the company said.
In The first year of the spoiled child on the market, the new brand brought in $48 million in gross sales, excluding returns.
The company is seeking to disrupt a market long dominated by traditional retailers by replacing the in-store experience with product recommendations powered by artificial intelligence and data.
At the heart of the business model is the proprietary technology — including technology developed by a former Israeli defense official — and the billions of data points it has collected from its millions of users.
In addition to developing new products and brands, Oddity is also trying to make beauty products more effective, the company said.
In late April, it announced it would invest more than $100 million to acquire biotech startup Revela and open a US-based lab.
The merger brought Oddity a team of scientists tasked with using artificial intelligence to create brand new molecules that could be used in its cosmetic brands and future lines.
In 2021, Oddity bought Voyage81a deep-tech AI-based computational imaging startup founded in 2019 by Niv Price, the former head of research and development for one of the Israel Defense Forces’ elite technology units, along with Dr. Boaz Arad, Dr. Rafi Gidron and Omer Shwartz.
The technology is capable of mapping and analyzing skin and hair features, detecting facial blood flows, and creating melanin and hemoglobin maps using an ordinary smartphone camera.
The filing comes after a year and a half of drought in the IPO market, which is just beginning to open up and show signs of green shoots.
Earlier this month, Mediterranean restaurant chain Cava went public and its shares rose as much as 117% during its market debut.
“[In 2022] investors didn’t want to go near IPOs, but now that they’re making money again and issuers are seeing they can get close to decent valuations, I think that’s bringing people back to the market,” said Matt Kennedy, a senior IPO market strategist for Renaissance Capital.
“The consumer sector lends itself well to these periods when investors can see a business model they understand, a company they may be familiar with, and also one that is typically profitable or near-profitable, preferably with growth.”