Is beauty skin deep

June 17, 2021

The beauty industry is one of the oldest in the world. For centuries, we have debated the true nature and form of beauty; can it be objectively defined? Or is beauty truly “in the eye of the beholder,” as the saying goes.

Many great philosophers like Plato, David Hume, and Immanuel Kant have tried to define the term beauty, yet a universally valid definition remains elusive. There is, however, one thing most of us can agree on: appearance is the most visible aspect of beauty. Throughout the ages, men and women have striven to enhance their appearance – investing time, energy, and money in the pursuit of beauty’s closest cousin: attractiveness.

Historians can trace our use of beauty products and cosmetics back to 3100 BC, when the ancient Egyptians used kohl to create dramatic eyes. With today’s evolving technologies, we have moved from simple products such as eyeliner, to highly sophisticated serums, Botox, fillers, and laser treatments. And now, the cosmetic industry has moved far beyond the face, offering beauty-seekers a wide variety of non-invasive products and procedures for the entire body.

COVID’s unexpected impact on the beauty business

Since the start of the COVID-19 pandemic, face masks have been mandated across the globe. Over time, we’ve gotten used to wearing them and seeing them on others. But few anticipated how face masks could be a tailwind for the cosmetics industry.[1]

Cosmetic centres around the world have seen a large increase in demand for Botox injections and laser treatments, specifically around the eyes and upper portions of the face – the areas highlighted by the face mask.

Meanwhile, the massive boom in video-conferencing has generated a hyperawareness of facial “imperfections.” Confronted with endless hours of poorly-lit, unflattering reflections of ourselves on Zoom calls, many are investing in aesthetic procedures to enhance their appearance online.

The result? Soaring demand for deep-plane facelifts, resurfacing laser treatments, and other non-surgical procedures across the globe.

Everyone is looking for a beauty boost, a break from lockdown monotony, or a fresh face for the summer terrace. This week, we introduce you to InMode, a portfolio holding that should benefit from the booming beauty market.

Business Overview

InMode was founded in 2008 and is headquartered in Yokne’am, Israel. InMode is an esthetic equipment company that designs, develops, and manufactures minimally invasive (MI) and non-invasive aesthetic medical products.

InMode uses fractional radiofrequency, which allows a more precise delivery of energy to targeted areas of the body with only a small incision. Hence, it is more effective than other non-invasive procedures, offers much faster recovery, and has a lower risk profile than full plastic surgeries.

Their MI product line is used to perform procedures, such as liposuction with simultaneous skin tightening, body and face contouring, and ablative skin rejuvenation treatments. While their non-invasive products can help with procedures, like facial skin rejuvenation, wrinkle reduction, cellulite treatment, and skin appearance and texture.

Target Market

According to Medical Insight, the global professional aesthetic industry is valued at $11.5 billion, and is expected to grow at a 9.9% CAGR in the next few years.

Growth in the medical aesthetic industry is being driven by the following factors:

  • An aging population that wants to remain youthful
  • A flight to out-of-pocket work among doctors and clinicians
  • Growth of social media and video-conferencing
  • Growing availability of non-invasive and minimally invasive procedures
  • Improving efficacy

InMode’s Competitive Advantages

  • First mover advantage in minimally invasive aesthetic market, delivering surgical-grade results with no competitor in sight
  • Strong barriers to entry – patents, development timelines, global regulatory approval, and peer-reviewed published clinical data (56 articles)
  • Brand recognition, feedback from doctors, and a strong safety track record
  • Aligned management team with a proven track record and industry expertise

Growth Strategy

  • Product development, releasing 2 new platforms every year (ophthalmology and ENT in 2021)
  • Distribution in existing and new markets
  • Cross-selling (20% of clients purchase a second platform within 18 months)
  • Growth of consumables from current 10-12% to 25% in the MT


  • InMode is led by an experienced team of entrepreneurs, who have seen a large market potential, given the treatment gap in the industry


  • The aesthetic laser and light-based treatment system industry is vulnerable to economic trends
  • Increased competition
  • Regulations could delay product launches

Global small cap companies like InMode are not always known by name, but they almost always touch our daily lives in important ways. As life slowly gets back to normal, you may notice a lot more flawless skin and toned bodies, as consumers take advantage of innovative medical aesthetic products delivered by market leaders like InMode.

Perhaps this gives new meaning to the saying — “beauty is skin deep”?


Global Alpha Capital Management Ltd.
June 17th, 2021