Hailey Bieber’s Rhode Joins e.l.f. Beauty in Historic $1 Billion Deal

In a historic step for the beauty business, mass-market cosmetics company e.l.f. Beauty—known for its reasonably priced, viral products—has bought Rhode, a skincare and makeup brand owned by Hailey Bieber, for a deal maybe worth $1 billion. Declared on May 29, 2025, this acquisition represents e.l.f. Beauty’s biggest to date signals a strategic change as the business moves into the prestige beauty market. Comprising $800 million in cash and stock at closing and a possible $200 million earnout depending on Rhode’s future expansion, the Deal highlights the increasing impact of celebrity-backed beauty brands and the ability of social media to create consumer demand. The specifics of the purchase, the histories of both businesses, the roles Hailey Bieber and her team will perform, and the wider ramifications for the beauty sector are examined in this piece.

The Deal: A Billion-Dollar Prospect

The arrangement between e.l.f. Beauty and Rhode is set to have $600 million in cash and $200 million in e.l.f. consideration at closing totaling $800 million. Beauty stock is open for customizing. Rhode’s performance over the next three years will determine an additional $200 million earnout, so determining the possible total value to be $1 billion, based on e.l.f. For a brand started in June 2022 with just 10 products sold exclusively direct-to-consumer through its website, Beauty, Rhode generated $212 million in net sales in the 12 months ending March 31, 2025—a stunning accomplishment. Closing in the second quarter of fiscal 2026, the Deal is expected to represent a major turning point for both businesses.

With vegan and cruelty-free products available at reasonable prices—often as low as $2 to $6.50—through stores like Walmart, Ulta Beauty, and Target, e.l.f. Beauty, headquarters in Oakland, California, has positioned itself as a disruptor in the cosmetics space. Rhode, on the other hand, appeals to a more wealthy customer base drawn to Hailey Bieber’s fresh-faced, “glazed donut skin,” operating in the higher price range with products averaging in the high $20s. From Gen Z and millennials to the burgeoning Gen Alpha market, this purchase diversifies e.l.f.’s portfolio by combining its budget-friendly ethos with Rhode’s prestige appeal.

The Rising of Rhode: The Beauty Empire of Hailey Bieber

Launched Rhode in June 2022, 28-year-old model, entrepreneur, and wife of pop singer Justin Bieber named it after her middle name. Beginning with a simple three-product lineup—Peptide Glazing Fluid, Barrier Restore Cream, and Peptide Lip Treatment—the brand rapidly grew to include blushes, colored lip balms, lip liners, and even a viral lip gloss-toting phone case. As Bieber explained, Rhode’s philosophy is “one of everything good,” providing multitasking, effective skincare, and hybrid makeup created with deliberate ingredients for all skin types. Supported by a team of experts—including dermatologists and cosmetics chemists—the brand connected with young consumers driven by Bieber’s social media presence—55 million followers on Instagram and 15 million on TikHub.

Rhode’s rise has been explosive. With a 365% year-over-year increase in exposure via non-paid channels, including social media and press, it became the No. 1 skincare brand in Earned Media Value (EMV) in 2024, having achieved $213 million in net sales in less than three years, doubled its consumer base in the past year, and Bieber’s clever marketing, which popularized trends like “glazed donut skin” and “latte makeup,” increased the brand’s appeal and exceeded rivals like Summer Fridays’s Lip Butter Balm in direct sales of lip treatments. Rhode’s cultural relevance was further reinforced by a limited-edition collaboration for a “Strawberry Glazed Donut” Peptide Lip Tint with Krispy Kreme. Plans to start in Sephora stores all around the United States, Canada, and the United Kingdom this fall and late 2025 mark their first foray into physical retail, a move now supported by e.l.f.’s resources.

Bieber’s vision for Rhode came from her experiences as a model, working with top makeup artists and skincare experts since age 17. She saw a void in the market for straightforward, useful products devoid of excessive trendiness or prohibitively high cost. Emphasizing accessibility and inclusivity, she told PEOPLE in 2022, “It was essential to me that if I open the world of Rhode, everyone is invited.” Together with high-impact campaigns, creative in-real-life activations, and close community involvement, this ethos helped Rhode become a lifestyle brand with a passionate following—shown by fans camping overnight for a Los Angeles pop-up.

e.l.f. Beauty: An Interferes in Its Own Right

Established in 2004, e.l.f. Beauty—short for “eyes, lips, and face”—has become well-known for reasonably priced, vegan, cruelty-free cosmetics by leveraging digital expertise and TikHub marketing to appeal to Gen Z and millennial consumers. Reflecting its explosive expansion, the company’s net worldwide sales skyrocketed 28% to $1.3 billion in its fiscal year ending March 2025, a dramatic contrast to its $230 million in 2016. With Naturium and the incubated Keys Soulcare (by Alicia Keys) hitting all-time sales highs last year, previous acquisitions including the clean-beauty brand Well People for $27 million in 2020 and skincare brand Naturium for $355 million supported e.l.f.’s portfolio and skincare focus.

The reason e.l.f. is successful is its ability to challenge conventions by providing goods that compete with upscale “dupes” while keeping low prices and a natural, interesting online presence. With 34 years in the consumer space, Chairman and CEO Tarang Amin commended Rhode’s trajectory, noting, “In less than three years, they’ve gone from zero to $212 million in net sales, direct-to–consumer only, with only 10 products. That was not something I thought was feasible. In line with e.l.f.’s vision to “create a different kind of company,” he referred to Rhode as a “like-minded disruptor,” so breaking beauty boundaries. Amin told Fortune that the purchase, which targets Gen Alpha via Bieber’s impact, is a bet on Rhode’s readiness for “rocketship growth.”

Roles and Syntagies following acquisition

Retaining her role as founder and stepping into an enlarged post as Rhode’s Chief Creative Officer and Head of Innovation, Hailey Bieber will remain extensively engaged supervising creative direction, product innovation, and marketing. Leveraging her cultural tastemaker reputation and beauty influence, she will also be a strategic adviser to the merged businesses. Along with CEO Nick Vlahos (formerly of The Honest Company), co-founders Michael D. Ratner and Lauren Ratner will keep Rhode from its Los Angeles headquarters running under consistency. This framework fits e.l.f.’s acquisition strategy; Amin told The Business of Beauty, “We don’t overintegrate a brand… We want to help a founder realize his vision.

Built on shared values of disruption and creativity, the partnership is a “powerhouse alliance,” per e.l.f.’s press release notes. Rhode’s reputation fits e.l.f.’s mass-market strength, so diversifying its consumer base while keeping a consistent approach to captivating and entertaining consumers. Just three years into this journey, Bieber said, “Our partnership with e.l.f. Beauty marks an incredible opportunity to elevate and accelerate our ability to reach more of our community with even more innovative products and widen our distribution globally.” Now supported by e.l.f.’s infrastructure, the Sephora rollout will increase Rhode’s profile and give e.l.f. a fast-growing brand to support its skincare aspirations.

Obstacles and Context

For e.l.f. Beauty, the purchase falls at a difficult period. With earnings of 78 cents per share and income of $332.6 million, the company exceeded Wall Street’s fiscal fourth-quarter projections in May 2025 but refrained from providing guidance due of uncertainty on the Trump administration’s changing tariff policies. With 75% of e.l.f. products imported from China (down from 100% in 2019), a 145% tariff temporarily imposed before being dropped to 30% presents problems. To help with expenses, e.l.f. announced a $1 price rise beginning August 1, 2025; its community responded with 99% positive sentiment. Funding $600 million of the Deal with debt amid high interest rates and a possible economic downturn raises risks, as does the bet that consumers will keep spending on luxury skincare.

The beauty business is negotiating a crowded field of celebrity brands as well. With successes like Selena Gomez’s Rare Beauty ($367 million in revenue) and Rihanna’s Fenty Beauty, a billionaire-making venture with LVMH, a 2024 NielsenIQ study found that 43 celebrity beauty brands overall exceeded $1 billion in sales in 2023. Brands like Kosas, Makeup by Mario, and One/Size have battled to attract consumers, though, with cash-strapped consumers and private equity firms dubious of their longevity. The move by e.l.f. to grab Rhode before rivals highlights its competitive advantage, but success depends on keeping momentum.

ramifications and future perspective

One of the most important celebrity beauty acquisitions since Ryan Reynolds’ Mint Mobile sold to T-Mobile for $1.3 billion in 2023, this $1 billion deal emphasizes the value of star power and social media in beauty. Driven by Bieber’s influence and Gen Z appeal, Rhode’s explosive rise positions e.l.f. to bridge mass and prestige markets, targeting higher-income consumers while nurturing its core base. Goldman Sachs analysts see the change as “a strategic positive,” diversifying e.l.f.s’ skincare line. Still, hurdles are tariffs, debt, and economic uncertainty.

To Hailey Bieber, the Deal represents a personal victory. She joins friends like Kylie Jenner, who sold a $600 million stake in her cosmetics line to Coty, likely reaping nine figures pretax (ownership estimates range from 50% to 70%). Bieber’s growing involvement guarantees her vision lives with the help of co-founders and e.l.f. driving worldwide expansion. “This is only the beginning,” she said to ABC News, signifying Rhode’s next chapter. As Amin informed WWD, e.l.f. has as its emphasis organic development and disruption: “How much can we grow our brand portfolio? How far we can keep upsetting the beauty business?

With her $1 billion acquisition of Hailey Bieber’s Rhode, e.l.f. Beauty unites two disruptors to redefine beauty by boldly fusing mass-market accessibility with prestige innovation. Driven by Bieber’s influence and a passionate community, Rhode’s quick climb fits e.l.f.’s digital savvy and expansion path. With Bieber leading creativity and e.l.f. fueling scale, the deal positions both brands for worldwide reach even while issues like tariffs and economic headwinds continue. This alliance shows the power of vision, community, and strategic risk in determining the future as the beauty business changes.