The beauty and wellness platform behind Il Makiage and Spoiled Child is investing more than $100 million to acquire a biotech startup and open a lab in the US to produce the most effective cosmetics on the market, company announced Thursday.
Oddity acquired startup Revela for $76 million, its largest acquisition to date, and is investing another $25 million to establish Oddity Labs in Boston. The merger will bring Oddity a team of scientists tasked with using artificial intelligence to create entirely new molecules that can be used in its cosmetics brand and future product lines.
AI-based molecular discovery is a common tool used in the pharmaceutical industry to develop new drugs, but it is not widely used in the beauty and wellness industry. Traditional brands have long relied on building products using proprietary formulas with similar active ingredients such as retinol, hyaluronic acid and peptides.
Oran Holtzman, co-founder and CEO of Oddity, said in an interview with CNBC: “While my competitors have been doing more of the same things for decades and serving consumers with the same ingredients in the same old channels, service, but we’re building the future of the category.” .
“Through this acquisition, we are using biologics to bring game-changing, science-backed beauty and wellness products to the market and to our users. It’s in our DNA and we’re not here to do more of the same, but It’s about building something new,” he said.
Oddity hopes to develop new molecules to address specific pain points, such as hair loss, wrinkles and the myriad of other issues consumers have long turned to legacy brands for, with mixed results.
“People ask … why isn’t the pharmaceutical industry getting into beauty?” said Evan Zhou, Oddity’s new chief scientific officer and Revela’s co-founder and CEO.
“I think it’s hard because the culture doesn’t align, right? So pharma companies kind of look down on beauty, right? Because that’s not what they’re in this business for,” he said. “Everyone wants to cure cancer, that’s why people become scientists.”
(Left to Right): Dr. David Zhang, Oddity’s new Head of Bioengineering, Chief Scientific Officer and Co-Founder of Revela; Shiran Holtzman-Erel, Oddity Co-Founder; Oran Holtzman, Oddity Co-Founder and CEO; Evan Zhou, Ph.D., New Chief Scientific Officer of Oddity and Co-Founder and CEO of Revela.
Alberto Vasari of ODDITY
Traditional beauty and wellness companies have historically faced difficulty attracting top scientific talent, Zhou said. As a result, the industry has lagged in innovation, instead focusing investment on branding and marketing, he said.
But after experiencing firsthand the limitations of beauty products – seeing his mom spend thousands of dollars on conditioner that doesn’t reverse her hair loss, or seeing his wife buy an expensive moisturizer with questionable promises – Zhou was inspired to bring his biotech prowess to the world of beauty and grooming. The wellness industry creates products that absolutely work.
“I want people with problems to be able to ask questions online, be able to take pictures and then get solutions,” Zhou said. “I want them to be able to say, ‘Oh yeah, I have, you know, this hair loss, or I have these wrinkles here,’ and for us to be able to spit out a solution that works 100 percent of the time. “
Revela has developed two novel molecules that are already in the early-stage market — ProCelinyl, which promotes hair growth, including eyelashes and eyebrows, and Fibroquin, an anti-aging ingredient that Zhou believes can rival retinol — — and without side effects.
These molecules, and many more currently in development, will be added to Oddity’s existing product line and future brands in development.
“We have this very special opportunity to truly deliver and create game-changing products with new science-backed ingredients that the world’s beauty giants can only dream of,” said David Zhang, Oddity’s new head of bioengineering and co-founder, and chief executive of Revela. Science Officer.
Joining forces with Oddity allows Revela to “reach consumers directly at this unbelievable scale,” Zhang said. “Oddity knows exactly where the pain is worst, so you can visualize the best molecules for your most pressing problems.”
Founded in 2018 by Holtzman and his sister Shiran Holtzman-Erel, Oddity uses data and artificial intelligence to develop brands and provide customers with tailored product recommendations.
The direct-to-consumer platform will bring in $395 million in total revenue and $500 million in sales in 2022, the company said. These figures do not include returns. The 2022 sales figures represent slightly higher revenue than earlier preliminary results for the same period.