Il Makiage creator Oddity says it’s profitable
Oddity Il Makiage
Coutesy: Oddity
Oddity — the direct-to-consumer beauty and wellness platform known for its ubiquitous Il Makiage social media ads — is making money and growing in an environment that’s increasingly risky for purely digital retailers.
The Tel Aviv-founded company looks like it could even be preparing for an initial public offering, despite rising uncertainty in markets and the economy, experts told CNBC.
Oddity, which is home to the Il Makiage makeup line, the Spoiled Child skin and hair care brand, and a third brand that’s in the works, declined to say whether it’s planning to go public but did reveal some of its financial metrics with CNBC.
Since its U.S. launch in 2018, Oddity has achieved profitability, the company said, making $380 million in gross sales in 2022. On average, its gross sales have doubled each year since 2018, the company added.
In Spoiled Child’s first year on the market, the new brand brought in $48 million in gross sales. Oddity declined to share its return rate; its gross sales total does not include returns.
Despite the high cost of customer acquisition for most DTC retailers, Oddity says it is making money the first time a customer buys a product, not just in repeat sales, and it boasts more than 40 million users.
The business, which is as much of a tech company as it is a beauty and wellness company, is seeking to disrupt a market long dominated by legacy retailers by replacing the in-store experience with product recommendations driven by artificial intelligence and data.
“How is it possible that this beauty customer is spending all of her time online, on Insta, on YouTube, getting education, inspiration, but then ultimately transacting in stores?” said Lindsay Drucker Mann, Oddity’s global chief financial officer. “It’s not that she wants to go to the store, it’s that she needs help. She needs help choosing, she needs recommendations.”
And that’s where Oddity comes in.
How Oddity does it
Launched in 2018 by brother and sister duo Oran Holtzman and Shiran Holtzman-Erel, the heart of Oddity’s business model is its proprietary technology — including tech developed by a former Israeli defense official — and the billions of data points it has collected from its millions of users.
A digitally native, purely DTC company, the retailer underscores that 40% of its workers are technologists and no one on staff come from the beauty and wellness industry.
Instead of creating products that customers would need to try in a store, Oddity uses data and AI to make tailored product recommendations for clients. What’s more, it plans to use these same tools to build numerous new brands in the future.
Oddity’s first brand, Il Makiage, works to select the “perfect” foundation match for any skin type with its “powermatch quiz,” which is an AI-powered product recommendation algorithm, the company says. The quiz takes customers through a series of questions about their skin type and tone and then scans a picture…