e.l.f Enters the World of rhode for $1 Billion
By Meghan Kallos*
The internet’s favorite it girl found a partner in e.l.f. Beauty, a match poised to disrupt the beauty industry and bridge digital influence with real-world market power. This past May, e.l.f. acquired Hailey Bieber’s skincare line, rhode, for $1 billion. The deal is comprised of: $600 million in cash, $200 million in common stock, and the potential for an additional $200 million payout based on future growth over a three-year, post-closing period.[1] But how did rhode, a three-year-old startup, rise from a social-media sensation to a strategic acquisition target in such an uncertain M&A market?
Bieber launched rhode in 2022 with only three products: the peptide glazing fluid, barrier restore cream, and peptide lip treatment.[2] Since then, rhode has expanded into a ten-product lineup curated to blend Bieber’s “clean girl” aesthetic with efficacious, scientifically-backed formulas.[3] The company has achieved widespread success by creating a signature brand identity and selling an immersive experience through effortlessly chic marketing campaigns. It has generated a total of $212 million in net sales and doubled its consumer base in the 12 months preceding the high-profile deal.[4]
Even after this impressive performance, a $1 billion price tag has been labeled as a “stretch” in the modern M&A market, which has favored caution over plunging into high-risk transactions since 2022.[5] Buyers looking to diversify their portfolios have become reluctant to pay steep prices for unpredictable businesses that may fail to live up to their expectations of producing long-term value.[6]
Yet, e.l.f.’s Chairman and CEO, Tarang Amin, is ready to bet big on rhode. When asked about his motivation for acquiring Bieber’s young brand, Amin noted, “What gave us conviction for a billion-dollar deal is Hailey and Rhode’s track record, and what they’ve been able to build and achieve… She is a fellow disruptor, and that gives me a lot of confidence when I’m looking at a long-term M&A environment”.[7] This union marks the third and largest acquisition in e.l.f.’s history– following their purchases of W3ll People for $27 million in 2020 and Naturium for $355 million is 2023.[8] Arguably, this partnership is also e.l.f.’s most crucial.
Though e.l.f.’s revenue amounted to $1.3 billion in fiscal year 2025, growth has slowed significantly. Revenue only rose 4% from the same period last year, which may signal a cause for concern considering the company has seen 56% quarterly growth since 2023.[9] This acquisition must succeed for e.l.f., but how will it preserve the integrity of Bieber’s creative vision for rhode while securing consistent profitability? As stated in the M&A agreement, Bieber will retain her role as chief creative officer.[10] Her influence will ensure the intentional, value-driven world of rhode will mirror the quality and innovation that made it a breakout success.
While rhode’s billion-dollar sale may be a current outlier in a vigilant M&A market, it has raised the bar and become a trendsetter, once again, in the corporate sector. And the brand is not showing any signs of slowing down. This September, rhode will be launching its first physical in-store partnership with Sephora throughout North America and the U.K.[11] This expansion will allow rhode to evolve into a force that will continue making “one of everything really good,” shaping beauty culture, and capturing new audiences around the globe.[12]
[1] e.l.f. Beauty Announces Definitive Agreement to Acquire rhode in $1 Billion Deal, e.l.f Beauty (May 28, 2025), https://investor.elfbeauty.com/stock-and-financial/press-releases/landing-news/2025/05-28-2025-210536607.
[2] Celia Shatzman, Hailey Bieber Launches Rhode– And It’s Not Your Average Celebrity Beauty Brand, Forbes (Jun. 15, 2022), https://www.forbes.com/sites/celiashatzman/2022/06/15/hailey-bieber-launches-rhode-and-its-not-your-average-celebrity-beauty-brand/.
[3] about rhode, rhode https://www.rhodeskin.com/pages/about-us (last visited Aug. 26, 2025).
[4] Sheryl Estrada, Why e.l.f. Beauty’s CFO sees $1B Rhode acquisition as a strategic innovation move, Fortune (May 30, 2025), https://fortune.com/2025/05/30/why-e-l-f-beauty-cfo-sees-1-billion-rhode-acquisition-strategic-innovation-bieber/.
[5] Pamela N. Danziger, E.L.F. Continues to Disrupt the Beauty Business By Acquiring Hailey Bieber’s Rhode for $1 Billion, Forbes(May 31, 2025), https://www.forbes.com/sites/pamdanziger/2025/05/31/elf-continues-to-disrupt-the-beauty-business-by-acquiring-hailey-biebers-rhode-for-1-billion/.
[6] Jessica Chia Morris, Beauty M&A’s outlook: Which deals will get done in an uncertain market?, Vogue Bus. (May 12, 2025), https://www.voguebusiness.com/story/beauty/beautys-manda-outlook-which-deals-will-get-done-in-an-uncertain-market.
[7] Nateisha Scott, Rhode to Be Acquired by Elf Beauty for $1 Billion, Vogue (May 28, 2025), https://www.vogue.com/article/rhode-to-be-acquired-by-elf-beauty-for-dollar1-billion.
[8] Danzinger, supra note 5.
[9] Id.
[10] Scott, supra note 7.
[11] e.l.f. Beauty Announces Definitive Agreement to Acquire rhode in $1 Billion Deal, supra note 1.
[12] about rhode, supra note 3.
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