The beauty world has just witnessed one of the most impactful acquisitions in recent years. E.l.f. Beauty announced its purchase of Rhode, Hailey Bieber’s skincare brand, in a deal valued at up to $1 billion. But beyond the flashy headlines, this move sends a clear message about the present (and future) of the beauty sector — and how celebrity-backed brands are redefining the game.

 Financial Impact: A Billion-Dollar Bet or a Strategic Move?

The first thing that stands out is the size of the deal. E.l.f. will pay $800 million upfront (including $600 million in cash and $200 million in stock), with an additional $200 million tied to performance milestones. In total, this valuation represents a 5x multiple on Rhode’s current annual sales, which reached $212 million in the last fiscal year.

To finance the deal, E.l.f. turned to a combination of debt and new stock issuance — a bold financial play that reflects its strong confidence in Rhode’s potential. The brand has grown rapidly since its 2022 launch and is already profitable, a rarity among influencer-led beauty startups.

Beyond the Numbers: Strategy, Synergies, and Expansion

E.l.f. isn’t just buying a brand — it’s acquiring a community, a recognizable aesthetic, and a genuine connection with a young, digitally native audience. Rhode has successfully positioned itself as a clean skincare brand with minimalist design, viral products (like its lip balms), and a strong identity, largely driven by Hailey Bieber’s direct involvement.

With this acquisition, E.l.f. fast-tracks its entry into the premium skincare category — a high-margin, high-growth segment. Rhode will also expand from a 100% direct-to-consumer model into brick-and-mortar stores like Sephora in the U.S. and U.K., significantly boosting its visibility.

 What Does This Mean for Celebrity Beauty Brands?

The era of celebrity “endorsement-only” brands is over. Today, success comes from projects where celebrities are active and creative founders, not just the face of the product. Hailey Bieber will stay on as Rhode’s Chief Creative Officer and strategic advisor at E.l.f., ensuring the brand’s vision remains intact.

This model has already proven successful for brands like Fenty Beauty (Rihanna), Rare Beauty (Selena Gomez), and SKKN by Kim (Kim Kardashian). What they all have in common is clear: strong products, defined aesthetics, and highly engaged communities.

🧠 What Can We Learn from All This?

• Profitability matters. Unlike many DTC brands, Rhode is already generating solid revenue and profits — making it highly attractive for acquisition.
  
• A strong aesthetic is powerful. Rhode doesn’t just sell products — it sells a vision of beauty, minimalism, and authenticity.
  
• Creative integration adds value. Hailey’s ongoing involvement as founder and creative lead boosts credibility and consumer engagement.
  
• Beauty is more than cosmetics — it’s business, branding, and storytelling. The brands that understand this are growing well beyond social media.
  

Final Thought

E.l.f.’s acquisition of Rhode marks a moment of maturity for celebrity-led beauty brands. Having followers or going viral on TikTok isn’t enough anymore — brands need clear strategy, effective products, and real consumer connection. This deal doesn’t just validate Rhode’s model — it sends a powerful message to the market: well-built beauty brands can scale, professionalize, and become serious investments.