Hailey Bieber Sold Rhode to Elf Beauty for $1 Billion

Most celebrity beauty brands launch with fanfare and fade within two years, drowning in oversaturated markets and consumer skepticism. Studies show 80% of celebrity beauty lines fail to reach profitability. But Hailey Bieber looked at the beauty industry differently, not as a vanity project, but as a methodical business built on authenticity, simplicity, and viral marketing genius.

Fast forward to May 2025, and Rhode, Hailey’s skincare brand launched just three years earlier in June 2022, sold to Elf Beauty for up to $1 billion. The deal includes $800 million upfront in cash and stock, plus a potential $200 million earnout over three years. More impressively, Rhode generated $212 million in revenue in the 12 months ending March 31, 2025, doubled its customer base year-over-year, and became the number one skincare brand in Earned Media Value in 2024 with 367% growth.

The Rhode Elf Beauty Deal Results:

• Acquisition price: Up to $1 billion ($800M upfront + $200M earnout over 3 years)
• Annual revenue: $212 million in 12 months ending March 31, 2025
• Time to exit: Just 3 years from June 2022 launch to May 2025 acquisition
• Customer growth: Doubled customer base year-over-year
• Market position: #1 skincare brand in Earned Media Value (367% YoY growth in 2024)
• Hailey’s role post-acquisition: Founder, Chief Creative Officer, Head of Innovation, Strategic Advisor

At launch, Hailey started with just three products: Peptide Glazing Fluid, Barrier Restore Cream, and Peptide Lip Treatment. The strategy was radical minimalism in an industry obsessed with 10-step routines. Within three days, everything sold out. Within 11 days, Rhode crossed eight figures in sales. Within three years, she built a billion-dollar empire.

Why Skincare? Hailey’s Beauty Philosophy

When asked why she launched Rhode, Hailey’s answer reflected frustration with industry norms: “From day one, my vision for Rhode has been to make essential skin care and hybrid makeup you can use every day. I noticed a gap in the industry and created a simplified product lineup that wasn’t based on trends, overly expensive ingredients, or a 15-minute routine.”

That philosophy, radical simplicity paired with efficacy, became Rhode’s foundation. But Hailey’s approach went deeper, guided by principles learned from years as a professional model working with the world’s best makeup artists and skincare experts.

The Three-Pillar Strategy:

• Authenticity over hype: Every Rhode product came from Hailey’s actual routine, she wasn’t licensing her name to formulas she’d never use
• Barrier-first skincare: Focused on supporting the skin barrier something all skin types need, universal approach made products accessible to everyone
• Intentional minimalism: Started with three essentials instead of 20 products, created focus and reduced decision fatigue emphasizing quality over quantity

Hailey also brought serious preparation. She worked with cosmetic chemist Dr. Ron Robinson and dermatologist Dr. Dhaval Bhanusali to develop formulas using proven ingredients: peptides, niacinamide, hyaluronic acid, shea butter. Every product was dermatologist-tested, non-comedogenic, and formulated for all skin types.

The Rhode Story: From Glazed Donut Skin to $1 Billion Exit

The Pre-Launch Hype Machine

Rhode’s journey began long before June 2022. Hailey had been building the “glazed donut skin” aesthetic on social media for years, her dewy, glowing complexion becoming her signature look and generating millions of views.

Before launching, Hailey spent years sharing her skincare routine on Instagram and TikTok. Her “Get Ready With Me” videos showcasing the layering technique that created her glazed skin went massively viral. Followers obsessed over every product she used.

Building Anticipation:

• 18+ months pre-launch: Hailey and co-founders Michael D. Ratner and Lauren Ratner built anticipation
• 100,000+ waitlist: By the time Rhode’s website went live, massive demand already existed
• Social proof: “Glazed donut skin” videos accumulated hundreds of millions of views
• Organic following: 50+ million Instagram followers and 15+ million TikTok followers became built-in customer base

This wasn’t accidental. The Rhode Elf Beauty acquisition three years later validated that this pre-launch strategy created foundation for billion-dollar exit.

The Launch That Broke the Internet

June 15, 2022 marked Rhode’s official launch with three products, all under $30. Peptide Glazing Fluid at $29 featured hydrating gel-serum with peptides, niacinamide, hyaluronic acid. Barrier Restore Cream at $29 offered rich moisturizer with ceramides and niacinamide. Peptide Lip Treatment at $16 provided nourishing lip balm in three flavors.

Within minutes, the website crashed from traffic. Within three days, all products sold out. At peak demand, Rhode sold 36 units of Peptide Glazing Fluid per second. The brand’s then-CEO claimed Rhode “crossed the eight-figure threshold in just 11 days.”

Launch Metrics:

• Website crash: Within minutes from overwhelming traffic
• Complete sellout: Within 3 days across all SKUs
• Peak velocity: 36 units per second of Peptide Glazing Fluid
• Revenue milestone: Crossed eight figures in just 11 days
• Waitlist: 440,000 people meant restocks sold out instantly
• Secondary market: Scalpers listed $16 Peptide Lip Treatments on eBay for $50+

The scarcity drove more desire, and more desire drove more press coverage, creating a viral loop that traditional beauty brands spending millions on advertising couldn’t replicate.

The Growth Trajectory to $212 Million Revenue

Year 1: Foundation Building

Rhode launched June 2022 with 3 products priced under $30. By August 2023, the brand had sold 1 million units of Peptide Lip Treatment alone. The brand expanded to Europe including UK, France, Germany, Spain, Italy, Ireland, and Canada. In September 2023, Rhode introduced Peptide Lip Tint in 4 shades.

The first year established proof of concept. Products weren’t just viral moments but had staying power. Repeat purchase rates validated quality. International expansion tested whether Rhode’s appeal extended beyond US market.

Year 2: Acceleration Phase (2023-2024):

• Glazing Milk toner: Launched January 2024 extending “glazing” aesthetic
• Pocket Blush: Summer 2024 launch became instantly viral for texture and portability
• Krispy Kreme collaboration: Limited-edition Strawberry Glaze flavor created cultural moment
• Market leadership: Became #1 skincare brand in Earned Media Value with 367% YoY growth
• Revenue milestone: Exceeded $150 million annual revenue

Year 3: The Rocketship Phase

Rhode launched Peptide Lip Shape contour in January 2025 with 11 shades. Announced Sephora partnership for fall 2025 covering US, Canada, and UK. Doubled customer base year-over-year demonstrating accelerating growth not slowing. Generated $212 million revenue in 12 months ending March 31, 2025.

The Rhode Elf Beauty acquisition on May 28, 2025 came at perfect timing. Revenue accelerating, Sephora partnership imminent creating massive distribution expansion, customer base doubling showing sustainable growth, and market leadership in Earned Media Value proving brand strength beyond just Hailey’s following.

The Product Strategy: Less Is More

The Hero: Peptide Lip Treatment

Rhode’s flagship product became a cultural phenomenon. The $16 tube featured peptides for plumping and anti-aging, shea butter and cupuaçu butter for moisture, babassu oil for vitamin E, and three initial flavors: Salted Caramel, Watermelon Slice, Unscented.

The genius was in the execution. The glossy finish looked expensive. The squeeze tube was portable. The peptides gave it skincare credibility. The flavors created nostalgia as Hailey said products were “steeped in nostalgia.”

Why Peptide Lip Treatment Went Viral:

• Sales velocity: Over 1 million units sold by August 2023, just 14 months after launch
• Phone case accessory: Rhode introduced case designed to hold lip treatment on phone’s back, turning product into fashion statement
• Limited editions: Strawberry Glaze, Espresso, seasonal flavors each sold out reinforcing scarcity
• Price accessibility: $16 price point accessible to Gen Z while feeling premium
• Skincare credibility: Peptides elevated it beyond typical lip balm

The lip treatment alone likely generated $16-20 million in revenue during first year based on 1 million units sold, demonstrating how a single hero product can build an entire brand when executed perfectly.

Methodical Product Expansion

Unlike brands that launch 50 SKUs hoping something sticks, Rhode added products methodically. Peptide Lip Tint in September 2023 offered four sheer-but-buildable shades pairing each color with matching food items for Instagram virality. Glazing Milk in January 2024 extended the “glazing” aesthetic from serum to prep step.

Pocket Blush in Summer 2024 featured cream blush in compact form designed for on-the-go application, becoming instantly viral for texture and portability. Peptide Lip Shape in January 2025 wasn’t a lip liner but a lip contour with eleven shades and built-in smudger for the blurred “Gen Z pout” effect.

Product Development Principles:

• Solve real problems: Each product addressed issue Hailey faced personally
• Extend brand aesthetic: Everything supported dewy, glowy, effortless Rhode look
• Instagram-ready: Clean packaging and shareable unboxing experiences
• Multi-use functionality: Products served multiple purposes reducing need for separate items

Each product launch maintained the scarcity model. Announce product, build waitlist, sell out immediately, create secondary market demand, restock, repeat. This created continuous buzz without massive advertising spend.

The Marketing Genius: Building Hype Without Spending Millions

Social Media as Primary Channel

Rhode’s marketing strategy would be taught in business schools. The brand spent minimal on traditional advertising yet dominated beauty conversations. Hailey’s 54 million Instagram followers became Rhode’s marketing department. Every post featuring Rhode products reached millions organically.

Key tactics included GRWM videos showing real usage, product teasing months before launches creating anticipation, behind-the-scenes content from formula development, and user-generated content reshares amplifying authentic testimonials.

The Glazed Donut Skin Phenomenon:

• TikTok virality: Videos accumulated hundreds of millions of views making aesthetic synonymous with brand
• Searchable trend: “Glazed donut skin” became Google search term driving traffic
• Tutorial ecosystem: Beauty creators made countless how-to videos using Rhode products
• Organic reach: Zero ad spend for millions of impressions

Strategic Scarcity Creating FOMO

Rhode mastered the drop model creating scarcity that wasn’t accidental but strategic. Limited initial production runs reduced risk. Sellouts generated press coverage with headlines like “Rhode sells out in minutes.” Waitlists captured emails for retargeting. Urgency drove impulse purchases from fear of missing out.

Hailey’s famous friends became organic brand ambassadors. Kylie Jenner, Kendall Jenner, Lori Harvey, and Justine Skye posted about Rhode unpaid. When Kylie or Kendall shares your lip treatment to their combined 600+ million followers, you don’t need to buy Instagram ads.

Influencer Amplification:

• Celebrity endorsements: A-list friends shared products organically worth millions in advertising equivalent
• Beauty influencer PR: Packages created unboxing content, reviews, tutorials generating millions of impressions at zero cost
• Micro-influencer seeding: Smaller creators with engaged audiences drove authentic testimonials
• User-generated content: Customers sharing their Rhode routines created community feeling

The Elf Beauty Acquisition: Why $1 Billion Made Sense

The Deal Structure

On May 28, 2025, Elf Beauty announced definitive agreement to acquire Rhode for $800 million consideration at closing through cash and stock mix, plus $200 million potential earnout over 3 years based on growth targets, totaling up to $1 billion deal value.

Why did the Rhode Elf Beauty deal make sense for both parties? Elf Beauty built its empire on accessible luxury with high-quality products at drugstore prices. But the company needed prestige positioning and younger demographics. Rhode delivered both instantly.

Why Elf Wanted Rhode:

• Prestige entry: Rhode’s $16-30 price point sits above Elf’s $3-15 range, allowing prestige skincare entry
• Gen Z capture: Rhode dominates consumers aged 15-30, exactly who Elf needed long-term
• Sephora access: Rhode’s partnership launching Fall 2025 gives Elf first presence in premium retail
• Viral marketing DNA: Rhode’s social-first strategy complements Elf’s digital strengths
• Revenue growth: $212M revenue with doubling customer base showed rocketship trajectory worth paying for

Elf’s CEO Tarang Amin said: “We have the consumers everyone wants,” referring to Rhode’s young, engaged, high-spending customer base that beauty brands desperately covet.

What Hailey Secured

Beyond the $800 million+ payout, Hailey negotiated to continue as Founder, Chief Creative Officer, and Head of Innovation. She oversees creative, product innovation, and marketing while acting as Strategic Advisor to combined companies. Michael D. Ratner, Lauren Ratner, and CEO Nick Vlahos continue leading Rhode from LA office.

This structure lets Hailey maintain creative control while Elf provides global distribution, manufacturing scale, and retail relationships. Unlike founders who exit completely losing all influence, Hailey protected brand integrity and her long-term reputation.

The Earnout Incentives:

• $200 million potential: Paid over 3 years based on growth targets
• Alignment of interests: Elf gets sustained growth, founders get paid for performance
• Total possible payout: Full $1 billion if aggressive targets met
• Risk sharing: Both parties invested in Rhode’s continued success

The Competition: How Rhode Beat Established Brands

The beauty industry is ruthless. Massive brands with decades of history and billion-dollar marketing budgets dominate. Yet Rhode, a three-year-old brand, became number one in Earned Media Value in 2024. How did the Rhode Elf Beauty deal happen when so many celebrity brands fail?

Versus Kylie Cosmetics which launched earlier in 2015 and built $600+ million revenue at peak, but Rhode’s skincare-first approach and authentic positioning differentiated it from Kylie’s makeup focus. Versus Fenty Beauty where Rihanna disrupted with inclusivity through 40+ foundation shades, Rhode disrupted with simplicity offering one formula for all skin types.

Competitive Advantages:

• Minimalist approach: While others launched 50+ products, Rhode’s 10-15 SKUs created focus
• Authentic credibility: Hailey as working model had beauty expertise beyond just celebrity status
• Social-first strategy: Bypassed traditional marketing entirely going direct-to-consumer
• Viral moments: Manufactured through strategic content not accidental luck
• Scarcity model: Created desire through limited drops unlike always-available competitors

Versus traditional brands like Estée Lauder and L’Oréal that spent decades building credibility, Rhode bypassed traditional marketing entirely. Versus other celebrity brands like Selena Gomez’s Rare Beauty and Ariana Grande’s R.E.M. Beauty, Rhode’s minimalist approach and Hailey’s authentic beauty credibility gave it edge.

The Bottom Line

Hailey Bieber’s transformation from model and influencer to beauty mogul demonstrates that celebrity success can translate into genuine business excellence when paired with authentic product love, strategic thinking, and social media mastery. Building Rhode from concept to $1 billion exit in just three years, with $212 million annual revenue and 367% year-over-year Earned Media Value growth, proves that celebrity brands can compete with heritage beauty companies when execution is flawless.

Why Rhode Elf Beauty Deal Happened:

• Authenticity beats hype: Hailey genuinely used and loved products, consumers sensed authenticity not cash-grab opportunism
• Start minimal, scale methodically: Three products at launch, added only when demand proved concept, avoided inventory waste
• Social media as free marketing: 50+ million followers meant zero ad spend for massive reach, community-first approach
• Strategic scarcity: Sellouts created FOMO, waitlists captured emails, limited editions maintained excitement
• Accessible premium pricing: $16-30 affordable to Gen Z while feeling premium, maximized market size with healthy margins
• Viral moments manufactured: “Glazed donut skin” required years of strategic content before monetizing

The journey from three products and a waitlist to the number one skincare brand in Earned Media Value, Sephora partnership, and Elf Beauty acquisition represents one of the fastest successful beauty brand builds in history. What typically takes 10-15 years, Rhode achieved in 36 months through flawless execution.

Key Success Factors:

• Exit timing: Sold at peak momentum with accelerating revenue, Sephora partnership imminent, customer base doubling
• Maintained control: Unlike complete exits, Hailey negotiated to stay involved protecting brand integrity
• Product quality: Every formula had to justify the buzz, not just rely on celebrity name
• Price positioning: Sweet spot between accessible and premium captured mass market with healthy margins

What separates Hailey isn’t just fame. Kylie Jenner, Rihanna, and Selena Gomez all have comparable or larger followings. It’s the strategy: launching minimal products with maximum focus, building hype through authentic social content, creating scarcity that drives demand, pricing accessibly within premium positioning, and knowing when to sell to strategic acquirer that accelerates growth.

For entrepreneurs and influencers, the Rhode Elf Beauty story offers a blueprint. Authenticity beats celebrity hype when building sustainable brands. Social media is your best marketing channel if you build community first. Product quality must justify the buzz beyond just the name. Scarcity creates desire when managed strategically. Start minimal and scale methodically rather than launching everything at once. Price for mass accessibility with premium feel. Exit when growth trajectory maximizes valuation.

As Hailey said announcing the deal: “Just three years into this journey, our partnership with Elf Beauty marks an incredible opportunity to elevate and accelerate our ability to reach more of our community with even more innovative products.” She turned Instagram influence and a $16 lip balm into a billion-dollar empire, proving that when social media strategy meets product excellence, even three-year-old brands can command nine-figure exits worth up to $1 billion within 36 months of launching.

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