E.l.f. Beauty Acquires Hailey Bieber’s Rhode for A Billion

E.l.f. Beauty, one of the fastest-growing companies in the beauty industry, announced that it’s purchasing Hailey Bieber’s beauty brand, Rhode, for a deal valued at $1 billion.

Why It Hits: The eye-watering acquisition price for Rhode demonstrates that celebrity-backed beauty brands are some of the hottest commodities in the industry, as evidenced by the $2 billion valuation for Selena Gomez’s Rare Beauty (which minted her a billionaire) and the $1.2 billion valuation of Kylie Jenner’s Kylie Cosmetics (which sold to Coty for $600 million in 2019… but Jenner wants to re-acquire). The deal for Rhode makes Bieber similar royalty.

Behind the Makeup: E.l.f. went top shelf for its biggest-ever acquisition.

• The deal is made up of $800 million in cash and stock, along with an additional payout of $200 million that’s contingent on Rhode’s performance over the next three years.
• Bieber will stay on as Rhode’s chief creative officer and head of innovation, where she’ll oversee creative, product innovation, and marketing.
• The deal is expected to close later this year or in the first half of next year.

Last Looks: Rhode has been on a rocket ship since its founding three years ago — it has generated $212 million in sales over the past year with only ten products, primarily through ecommerce alone. The brand plans to expand to Sephora stores later this year.

According to CNBC, E.l.f. set its sights on Rhode for three reasons — Bieber’s celebrity status (which drove Rhode to the top spot in earned-media value), its desire to get more into skincare (it also acquired Naturium in 2023 for $355 million), and its ability to attract a higher-paying customer (E.l.f. products have an entry price point of about $7, while Rhode’s is at almost $30).

The partnership between the two could be… well… a seamless blend.

Prediction: We may officially be in the age of founders being both the best model and marketing for their own products.