Contour

Techy makeup company Oddity links a digital token to its IPO, tying crypto to regulated markets

Wednesday, April 27, 2022 by Robinhood Snacks |
Cateye goes crypto (Ilya S. Savenok/Getty Images)

Cateye goes crypto (Ilya S. Savenok/Getty Images)

Crypto primer... the moisturizing kind. Oddity is the tech-focused parent company of TikTok-approved makeup brand Il Makiage. Think: AR shade-matching and algorithmic foundation quizzes. Its employees are mostly data engineers with zero background in beauty. Now Oddity has become one of the first non-crypto companies to tie a blockchain-based security directly to its equity ownership. Let’s de-jargon that:

  • Oddity tokens: The viral D2C makeup company launched a digital “security token” that runs on the ethereum blockchain. The tokens are digital contracts that can be tied to assets like stocks, commodities, and real estate.
  • Investors could get: The token will convert into regular shares when/if Oddity goes public, at a 20% discount to the IPO price. But it won’t be tradeable until an IPO.
  • Oddity gets: Fresh cash from “accredited investors,” not just VCs. Accredited = $200K+/year or $1M net worth.
  • Oddity was valued at $1.5B after raising $130M in January, and is rumored to be prepping its public debut.

Ethereal blush… on ethereum blockchain. Oddity’s token will be issued through an SEC-registered blockchain platform called Securitize, which has been developing the (still tiny) market for security tokens. Oddity says its token is a “trailblazing” financial innovation. It might be onto something:

  • Security tokens could unlock an opportunity for more people to invest pre-IPO, changing the way private companies fundraise.
THE TAKEAWAY

Security tokens could also be a gateway… to wider crypto acceptance. Unlike the stock market, the “Wild West” of crypto is still largely unregulated. Security tokens could be a bridge between the new world of digital assets and the old world of traditional markets. They’re created and traded on digital platforms, like cryptocurrencies. But they’re offered as regulated assets, like stocks and bonds. That could help set a standard for crypto regulation.