Hailey Bieber’s Rhode has quickly become a poster child for celebrity-led beauty. Founded in 2022, Rhode rapidly gained traction with Gen Z consumers and is now set to be acquired by E.l.f. Beauty in a blockbuster deal worth up to $1 billion.
In this article, we dissect Rhode’s journey, from its launch and funding to its sale. For new entrepreneurs, this offers a clear view of the financial strategies and business models behind successful celebrity beauty brands.
The $1B Acquisition: Deal Terms and Sale Details
The acquisition of Rhode by e.l.f. Beauty, announced in May 2025, is structured as follows:
| Detail | Information |
| Sale Amount at Closing | $800 million (cash and stock, subject to adjustments) |
| Cash Component | $600 million |
| Stock Component | $200 million, approximately 2.6 million shares of e.l.f. Beauty common stock |
| Potential Additional Earnout | $200 million, based on future brand growth over three years |
| Total Potential Value | $1 billion |
| Net Sales (Last 12 Months) | $212 million |
| Buyer | e.l.f. Beauty |
Hailey Bieber, who reportedly held a 50-70% stake in Rhode, will remain as Chief Creative Officer and Head of Innovation, overseeing creative direction, product development, and marketing (The Hollywood Reporter).
She will also serve as a strategic beauty advisor to both Rhode and e.l.f. Beauty. The deal, expected to close later in 2025 pending regulatory approval, has boosted Hailey’s estimated net worth to $300 million, surpassing her husband Justin Bieber’s $200 million (Celebrity Net Worth). This financial milestone underscores the deal’s significance for entrepreneurs aiming to scale and monetize their ventures.
The Rise of Rhode: Launch, Growth, and Branding
Rhode’s launch strategy blended minimalist products with Hailey Bieber’s star power. Hailey Bieber introduced Rhode (her middle name) in 2022 with just a few essentials (now expanded to lip balms, blushes, etc.). The brand “quickly went viral, thanks in part to Hailey Bieber’s celebrity (including nearly 55 million Instagram followers).
From TikTok to Instagram, Hailey personally promoted Rhode in aspirational YouTube vlogs and pop-up events, creating an emotional connection with fans. This community-building strategy is a hallmark of successful Gen Z brands.
To fund growth, Rhode raised outside capital. In July 2024, the company took on an undisclosed investment from Angel Capital Management and Aser Ventures. (Aser Ventures is the investment arm of The RealReal’s CEO, indicating serious institutional interest.) This infusion likely helped ramp up marketing and product development as Rhode expanded its line.
By the year to March 2025, Rhode hit $212 million in net sales, an astonishing pace for a three-year-old startup. Moreover, in 2025 Rhode gained major retail traction: Sephora announced Rhode would launch in stores (U.S., Canada, U.K.) in fall 2025. These milestones illustrate how strategic partnerships (with Sephora) and viral marketing propelled Rhode to scale.
How Beauty Brands Are Valued When They’re Sold
When big companies buy beauty brands, they often look at how much money the brand makes in sales (revenue), rather than how much profit it earns. This is because many newer or fast-growing brands are still spending a lot to grow and aren’t very profitable yet.
For example, Hailey Bieber’s Rhode brand was making about $212 million in yearly revenue, and e.l.f. Beauty paid $800 million to buy it. That means they paid around 3.8 times the brand’s revenue (this is called a price-to-sales ratio, or P/S ratio).
This kind of ratio helps buyers figure out if the brand is worth the price based on how much it sells. A 3.8x P/S means the buyer believes the brand is strong, growing, and valuable.
Other brands have sold for different multiples:
| Brand | Owner | Deal Details | Year |
| Kylie Cosmetics | Kylie Jenner | 51% stake sold to Coty for $600M ($1.2B valuation) | 2019 |
| Dr Jart+ | Estée Lauder | Acquired for $1.1B (valued at $1.7B) | 2019 |
| Tatcha | Unilever | Acquired for ~$500M | 2019 |
These numbers vary depending on how fast the brand is growing, how popular it is, and how strong its reputation is with customers.
Valuation Models and Exit Considerations for Entrepreneurs
When plotting an exit, celebrity brand founders and their advisors model several factors:
- Revenue Growth Projections: Buyers look at historical and projected revenue. For Rhode, $212M in trailing sales and high growth justified a high multiple. If your brand can demonstrate repeat purchases and expansion plans (new products, new markets), your valuation range improves.
- Gross Margin & Profitability: The healthier the margins, the easier to justify the purchase price. High-volume, low-margin products (like commodity cosmetics) may fetch lower multiples. Brands should manage COGS and SG&A carefully; e.l.f.’s public filings will scrutinize how Rhode’s margins compare to its portfolio.
- Brand Intangibles: Founders must sell not just products, but the community value. Metrics like social media engagement, influencer partnerships, and earned media add credence. Industry reports (e.g., Nielsen, CreatorIQ) provide third-party validation that can boost price. For example, NielsenIQ’s finding that celebrity lines grew +57.8% (vs +11.1% for all beauty) can be cited to back up how strong these brands are.
- Comparable Transactions: Advisors use recent deals (Kylie, Rare rumblings, Jenny Johnson’s colorful Makeup Revolution deals, etc.) to set benchmarks. There’s no one-size-fits-all metric; each deal is unique. But public deals (like Coty’s takeovers) give guidance. E.g., “Coty paid ~4x sales for Kylie Cos.” or “L’Oreal paid ~8.5x for Drunk Elephant”. Knowing these deals helps investors anchor valuations.
- Deal Structure: The Rhode deal’s earnout shows another element: buyers may defer part of the payment to protect against underperformance. Entrepreneurs should structure deals to keep upside (e.g., if the brand outgrows targets, you get more). Also, consider post-sale roles carefully. Bieber will be CCO and adviser, meaning she must remain engaged. Some founders accept being passive CEOs or brand ambassadors instead.
Lessons for Entrepreneurs
Hailey Bieber’s success with Rhode offers actionable lessons for Grey Journal’s entrepreneurial audience:
- Leverage Personal Brand: Hailey’s 55 million Instagram and 15 million TikTok followers were instrumental in promoting Rhode. Entrepreneurs with a public presence should use it to build brand awareness (New York Times).
- Build Authenticity: Rhode’s connection to Hailey’s personal skincare routine created trust and relatability, a strategy entrepreneurs can emulate by aligning their brand with their values.
- Utilize Social Media: Viral trends like “glazed donut skin” amplified Rhode’s visibility. Entrepreneurs should harness platforms like TikTok to engage audiences and drive demand (Optimonk).
- Focus on Minimalism: Rhode’s curated product line resonated with consumers seeking simplicity. Offering fewer, high-quality products can differentiate a brand in a crowded market (Aesthetics Today).
- Strategic Partnerships: The sale to e.l.f. Beauty enables Rhode to scale globally. Entrepreneurs should consider partnerships or acquisitions to access resources and expand reach (Forbes).
Public reactions on X highlight the deal’s appeal, with users praising Hailey’s entrepreneurial success while some speculate about her motives (X Post). These discussions underscore the story’s relevance and influence, aligning with Grey Journal’s pillars.
Conclusion
Hailey Bieber’s sale of Rhode for $1 billion is a masterclass in entrepreneurial success, blending personal branding, strategic marketing, and timely partnerships. For Grey Journal readers, this story offers a blueprint for building a scalable business in a competitive industry. By leveraging authenticity, social media, and a minimalist approach, Hailey turned Rhode into a global phenomenon. As the beauty industry evolves, her journey inspires entrepreneurs to dream big, act strategically, and seize opportunities for growth.
“I always had big dreams for the company, and the most important thing to me is to keep bringing rhode to more spaces, places, and faces globally,” Hailey shared in a May 2025 Instagram post (E! Online). Her vision, now backed by e.l.f. Beauty sets the stage for Rhode’s next chapter and offers a powerful example for aspiring entrepreneurs.
