Beauty and wellness platform Il Makiage, behind Spoiled Child and Il Makiage, is investing over $100 million in order to open a U.S. lab and acquire a biotech company. The goal is to create the most effective cosmetics on the market.
Oddity has acquired startup Revela, its biggest acquisition to date, for $76 millions. It will also invest another $25 million in building Oddity Labs, a research facility located in Boston. The merger will give Oddity access to a team that is tasked with using artificial intelligence to create brand new molecules for its cosmetics lines and future lines.
AI-based molecule discoveries are a popular tool in the pharmaceutical sector to develop new drugs. However, it's not widely used in beauty and wellness. Legacy brands have relied for years on proprietary formulations that contain similar active ingredients such as retinol and hyaluronic acids.
Oran Holtzman told CNBC that "while my competitors have been doing the same thing for decades, and are serving the consumers the same ingredients through the same channels, we're building the future category."
With this acquisition, we will use biologics to deliver game-changing beauty and wellness products that are science-backed to the market, and to our customers. "This is our DNA. We are not here to do the same thing over and over again, but to create something new," said he.
Oddity hopes that it can develop new molecules to target specific pain points such as hair loss and wrinkles. Consumers have been turning to legacy brands for years to try to resolve these issues with mixed results.
Evan Zhou, Oddity’s new Chief Science Officer and Revela’s co-founder & CEO, said: "People ask... Why doesn't pharma get into beauty?"
"It's hard because cultures aren't aligned, right?" Pharmaceutical companies look down on beauty, don't they? "They didn't go into this business to do that," he explained. "Everyone wants to cure cancer. That's why scientists became scientists."
Oran Holtzman, Oddity CEO and cofounder Oran Holtzman, Dr. Evan Zhou (new chief science officer of Oddity and Revela) and Shiran Holtzman, Oddity founder Shiran Holtzman.
Alberto Vasari and ODDITY
Zhou stated that beauty and wellness companies with a long history have had a difficult time attracting top scientists. He said that as a result of this, the beauty and wellness industry has been slow to innovate and focused instead on branding and marketing.
After personal experience of the limitations of beauty products - watching his mother spend thousands on expensive hair serums which failed to reverse hair loss - or watching his wife purchase pricey moisturizers that made dubious claims - Zhou decided to apply his biotech expertise to the beauty and wellbeing industry in order to create products that would work.
Zhou explained that he wanted people to be able "to ask online for help, take a photo and get the solution," if they had a problem. "I want people to be able say, 'Oh yeah, I have this type of hair loss or I have these wrinkles,' and we to be able spit out solutions that work 100% of the time," Zhou said.
Revela developed two novel molecules which are currently on the market. ProCelinyl boosts hair growth including eyebrows and lashes, while Fibroquin is an anti-aging agent that Zhou claims rivals retinol's benefits without any side effects.
Oddity will add these molecules and others that are under development to its existing product lines as well as to any future brands in the works.
David Zhang, Oddity’s new head bioengineering as well as co-founder and Chief Science Officer of Revela, said: "We have a very special opportunity to deliver and create products that are game-changing with brand-new ingredients backed by science. Beauty giants around the world can only imagine this."
Zhang stated that joining forces with Oddity will give Revela an "incredible direct line to consumers on this scale." Oddity is able to pinpoint the exact location of the most severe pain, so they can create the best molecules.
Oddity, a brand-building platform launched in 2018 by Holtzman with his sister Shiran Holtzman Erel, uses data and artificial intelligence to create brands and provide tailored product recommendations.
The preliminary 2022 results show a slight increase in revenue over the earlier figures.