In one of the most talked-about beauty industry mergers of the year, e.l.f. Beauty (NYSE: ELF) has announced its acquisition of Rhode, the skincare and cosmetics brand founded by model and influencer Hailey Bieber. The deal, valued at $1 billion, marks a major consolidation between two brands that have resonated strongly with Gen Z consumers.
Founded in 2022, Rhode quickly gained cult status for its minimalist, science-backed skincare and sleek branding. In just three years, Bieber’s label scaled from influencer-driven hype to a profitable, global beauty business. “It’s one of the most beautiful businesses I’ve ever seen,” said Tarang Amin, CEO of e.l.f. Beauty, during an interview on Wednesday.
The acquisition will bring Rhode’s high-performance skincare products under the e.l.f. umbrella, expanding the company’s skincare footprint and creating opportunities to cross-sell across platforms. For e.l.f., known for its affordable, cruelty-free makeup, the move is also about more than just products—it’s a bold step to deepen its foothold in digital-native branding and influencer marketing.
A Natural Fit in the Gen Z Market
Both e.l.f. and Rhode have built robust followings among younger consumers. Rhode, helmed by a 20-something entrepreneur with 52 million Instagram followers, has positioned itself at the intersection of social media virality and clinical credibility. e.l.f., meanwhile, has consistently outperformed larger competitors by leveraging TikTok trends, launching edgy campaigns, and staying affordable during a time of consumer inflation.
“Gen Z doesn’t just buy products; they buy into stories and authenticity,” said Sarah Robbins, a retail analyst at Piper Sandler. “This deal pairs a legacy of innovation at e.l.f. with the cool-factor of Rhode. It’s strategic and culturally resonant.”
Hailey Bieber will stay on in a creative leadership role at Rhode, which will continue to operate as a distinct brand under the e.l.f. portfolio. The company plans to scale Rhode’s global reach through e.l.f.’s established distribution networks and e-commerce infrastructure.
Diversification Beyond China
The acquisition also aligns with e.l.f. Beauty’s broader efforts to diversify its supply chain, especially in light of growing geopolitical tensions and rising labor costs in China. Currently, over 65% of e.l.f.’s products are sourced from China. With Rhode’s manufacturing partnerships based largely in the U.S. and South Korea, the deal helps spread sourcing risk and appeals to consumers seeking transparency and ethical practices.
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“This transaction not only makes sense from a brand synergy perspective, but it’s also a forward-thinking supply chain play,” said Anand Kapoor, senior vice president of global operations at a competing beauty conglomerate. “Reducing overdependence on Chinese manufacturing is now a major risk-management imperative.”
Financial and Market Outlook
The $1 billion price tag reflects the rapid ascent of Rhode and the potential upside e.l.f. sees in its continued growth. Analysts estimate that Rhode generated more than $180 million in revenue last year, a significant feat for a startup less than three years old.
Following the announcement, shares of e.l.f. Beauty fell slightly by 1.33%, a typical market reaction to a large capital outlay. However, Wall Street appears bullish on the long-term prospects. Jefferies upgraded e.l.f.’s rating to “Buy,” citing Rhode’s strong brand equity and high margins.
As of Wednesday’s close, e.l.f.’s market capitalization stood at just over $10 billion. If Rhode’s integration proves successful, it could represent a near-10% boost in top-line growth annually.
Industry Reaction
The beauty sector, already one of the most dynamic areas of retail, has seen increasing consolidation as legacy players like Estée Lauder and L’Oréal face stiff competition from niche, influencer-founded brands. What sets e.l.f. apart, however, is its ability to move swiftly and remain digitally fluent.
“Most conglomerates are still figuring out how to engage with digital-first consumers,” said Michelle Vance, editor at Beauty Insider Weekly. “e.l.f. doesn’t just understand the language—they’re fluent in it. Adding Rhode strengthens that fluency.”
Meanwhile, Rhode’s success offers a compelling case study on the power of personal branding when backed by high-quality product development. Bieber, who has taken an active role in product formulation and marketing, called the acquisition “a dream partnership.”
“I started Rhode to make skincare that I would actually use every day—clean, effective, and stylish. With e.l.f., we can take that mission global without compromise,” she posted on Instagram.
Looking Ahead
The transaction is expected to close in the third quarter of 2025, pending regulatory approval. Both companies have hinted at upcoming product collaborations, seasonal drops, and expanded retail presence through major beauty retailers and direct-to-consumer platforms.
With the Rhode acquisition, e.l.f. continues to prove that it’s not just a drugstore brand—it’s a savvy, digitally-native powerhouse built for the future of beauty.
