The IPOX® Watch - IPO Pre-Launch Analysis: Oddity Tech
COMPANY DESCRIPTION
Oddity Tech Ltd is an Israel-based make-up and beauty company founded in 2018. The company operates platforms aiming to disrupt the global beauty and wellness market with brands Il Makiage and SpoiledChild.
BUSINESS MODEL
Oddity Tech generates revenue through sale of beauty and wellness products directly to consumers. Its key brand, Il Makiage, is a digital retail platform that combines social media and AI-powered questionnaires to match customers with makeup products and connects users to beauty influencers promoting the firm's products. According to Oddity Tech, Il Makiage leverages data science, machine learning, and computer vision to provide a personalized user experience. The company also operates SpoiledChild, a brand focusing on skin and hair products as well as supplements. The firm's main markets are the U.S., Europe and Australia.
Oddity Tech has over 4 million active customers and a platform reaching over 40 million users. The company claims to have over 1 billion unique data points on beauty preferences that inform its product.
GROWTH STRATEGIES
Oddity Tech aims to grow through expanding its AI-powered personalized matching technology across new product categories and geographic regions. It also plans to leverage user data and digital engagement to drive viral growth. Additionally, the company may pursue strategic acquisitions or investments in complementary beauty and wellness brands, products, or technologies. For example, in April 2023, they acquired biotechnology firm Revela, which uses "AI-based molecule discovery" for new products.
USE OF IPO PROCEEDS
Oddity Tech plans to use the IPO proceeds to obtain additional working capital, create a public market for its shares, further develop and launch new brands, and potentially pay for acquisitions/investments.
IPO HISTORY
Oddity Tech debuted on NASDAQ on 7/19/2023, pricing its shares at $35, above its previously announced range of $32 - $34 per share. Instead of the planned 10.5m shares, the company offered approximately 12.1m shares for an IPO offer size of $424 m, exceeding the previously anticipated $347m. The new terms brought the firm's implied market capitalization up to $2b. However, considering employee stock options, the company's fully diluted value is closer to $2.4b. Based on the company's reported financial information for 2022, $324.5 million in revenue and a net income of $21.8 million, the new offer price implies a P/S ratio of approximately 6.2x and a P/E ratio of around 97.2x.
The IPO is led by lead managers Goldman Sachs, Morgan Stanley and Allen & Company. Trading starts on Wednesday, July 19, 2023 under the ticker symbol ODD.
