Orens Holtzman’s beauty bet soared, then collapsed after an ad algorithm shock

Oren Holtzman, now CEO of Oddity, bought control of the struggling Israeli cosmetics company Il Makiage in 2013 at age 29, borrowing money and mortgaging his home to pay 12 million shekels for a business carrying about 40 million shekels in debt. At the time, many doubted the move, but Holtzman said he intended to list the company in New York.

That wager turned into a global success. After shifting heavily online, expanding internationally and bringing in a global partner, LVMH, Oddity Tech went public on Nasdaq and, less than two years later, reached a peak valuation of 4.3 billion dollars. The company, which also owns SpoiledChild and the recently launched Methodiq dermatology brand, had been posting double-digit growth in revenue, net profit and operating cash flow. Holtzman and his sister, Shiran Holtzman-Erel, the company’s chief product officer, positioned it as a tech-driven beauty business built around personalized online makeup shopping.

Holtzman also cashed out heavily at the top, selling shares last year for 385 million dollars in his third sale, bringing his total realized proceeds to almost 700 million dollars. But the story has reversed sharply. Oddity now trades at about 630 million dollars, after plunging 86% from its peak, following what the company described as a disruption in the algorithm of its main advertising partner. The problem pushed customer-acquisition costs sharply higher and hurt revenue, and Oddity withheld full-year guidance.

The company says the issue is technical, not a sign of weak brand demand or market saturation, and it affected multiple markets including the U.S., Canada, Britain, Australia and Israel. Holtzman said on the latest earnings call, “We hope, based on the improvement we are seeing today, that we will solve this disruption and return to our long record of strong, consistent growth and attractive profitability.” Still, Wall Street remains skeptical, with most analysts neutral and none recommending buying the stock.