Rhode, a skincare brand founded by Justin Bieber’s wife Hailey Bieber, announced that it has been officially acquired by the well-known American cosmetics company elf Beauty for a transaction amount of up to US$1 billion.
This acquisition far exceeds the amount of US$600 million that Coty Group paid to acquire 51% of Kylie Cosmetics owned by Kylie Jenner in 2019, making it one of the most watched M&A cases in the beauty industry in recent years.
Since its establishment in 2022, Rhode has risen rapidly in less than three years. With only 10 products and a full direct sales model – through official channels such as official websites, APPs and LINE, Rhode has achieved annual revenue of US$212 million.
Thanks to Hailey’s star effect and market strategy, the brand ranked first in the 2024 non-paid media communication value ranking, with an annual growth rate of 367%, strongly impacting the traditional pattern of the beauty industry.
Rhode products are “simple and efficient”, focusing on daily basic skin care and light makeup. From the initial essence, moisturizer and lip care products to the later launch of the hotly discussed “mobile phone case lip glaze” and water light blush stick, each new product has become a topic on social media.
According to FactSet data, the transaction consists of US$800 million in cash and stock, and another US$200 million in floating consideration based on growth performance in the next three years.
Hailey Bieber will continue to serve as the brand’s creative director and product innovation director after the transaction, fully steering Rhode’s product development and marketing strategy.
It is worth noting that Rhode officially entered Sephora’s offline stores last week, marking the brand’s expansion of traditional retail channels.
After the acquisition news was announced, elf Beauty’s stock price rose by more than 25%. “I’ve been in the consumer goods industry for 34 years, but I’m still amazed at how fast Rhode is growing,” said Tarang Amin, the company’s CEO, in an interview with CNBC.
Elf Beauty was founded in 2004 and its name comes from “eyes, lips and face”. It is known for its affordable prices without sacrificing quality.
The brand was initially sold through its official website and later expanded to Target stores across the United States. In recent years, it has rapidly risen with the help of social media platforms such as TikTok.
Tarang Amin pointed out: “Some consumers are willing to pay for high-priced products, but there are also many people who cannot or are unwilling to afford expensive prices. elf provides them with a cost-effective option.”
The company has long insisted on investing resources in product research and development rather than advertising, determining product direction through consumer community feedback, and relying on “word of mouth” to build brand influence.
In 2024, elf has become the highest-selling mass cosmetics brand in the United States, surpassing traditional industry giants.
As early as 2023, elf Beauty completed the acquisition of skincare brand Naturium. This time, Rhode will be included in its ranks to further consolidate its layout in the high-end beauty market.
Amin said: “The average selling price of elf’s core products is $6.5, while Rhode’s is over $20, which can help us expand to different consumer levels. Although the prices are different, the way we interact with consumers will not change.”
Despite its rapid development, elf Beauty is currently facing some challenges. Since about 75% of the company’s products are manufactured in China, the US government has imposed a 30% tariff on Chinese imports. The company will increase product prices by an average of $1 from August 1, 2025 to cope with cost pressure.
The successful acquisition of Rhode not only opened the door to the high-end skin care market for elf Beauty, but also indicated that in the era of social media-driven beauty, the competition between emerging brands and traditional beauty giants will become more and more fierce.