Hailey Bieber’s beauty brand Rhode has been acquired by E.L.F. Beauty for a reported $1 billion, marking a monumental shift in her financial landscape and business trajectory, though she has not yet reached billionaire status. This comprehensive guide explores the intricacies of the deal, her strategic approach to building a successful brand, and her personal vision for investing her substantial earnings for her son’s future.
The beauty world buzzed when Hailey Bieber’s skincare company, Rhode, was acquired by industry giant E.L.F. Beauty in a deal reportedly valued at $1 billion. This acquisition isn’t just another celebrity endorsement success story; it’s a testament to a new era of entrepreneurial prowess, particularly for female founders. While the “billion-dollar” figure captured headlines, the nuances of the deal and its impact on Bieber’s personal fortune, as well as her future plans, offer a deeper look into the evolving landscape of celebrity-driven businesses.
The Billion-Dollar Question: Is Hailey Bieber Now a Billionaire?
Despite the eye-popping $1 billion valuation, Hailey Bieber is “probably not yet” a billionaire, though she is exceptionally close. The deal’s structure involves a mix of upfront payment and performance-based incentives, coupled with significant tax implications.
Breaking Down the $1 Billion Deal
- Upfront Payment: E.L.F. Beauty reportedly paid $800 million at closing, a combination of cash and E.L.F. stock.
- Performance-Based Payouts: An additional $200 million is tied to sales goals and brand performance over the next three years. This portion is not guaranteed and depends on Rhode meeting specific targets.
- Co-Founder Split: The performance bonuses will be split among Bieber and her co-founders, Lauren and Michael D. Ratner.
While the exact equity stake Hailey Bieber held in Rhode is not public, industry estimates suggest founders often retain 50-70% in celebrity startups. Assuming a 60% ownership, her potential gross earnings from the sale could be around $600 million ($480 million upfront and $120 million if all targets are met).
The Reality of Her Payday
Several factors reduce the take-home sum:
- Stock vs. Cash: A significant portion of the upfront payment is in E.L.F. stock, whose value can fluctuate.
- Taxes: As a California resident, Bieber is subject to a substantial 38% capital gains tax. After taxes and co-founder splits, finance influencers like Haley Sacks (mrs. dow jones) estimate her net payout to be closer to $435 million.
When factoring in her pre-deal net worth (estimated at $20-$30 million) and other assets and endorsements ($10-$20 million), Hailey Bieber’s total estimated worth after the Rhode sale is around $630-$650 million. This places her firmly in the upper echelon of celebrity entrepreneurs, alongside figures like Kylie Jenner and Rihanna, but just shy of the billionaire mark.
Rhode’s Meteoric Rise: A Blueprint for Community-Driven Success
Rhode’s success, launched in 2022, is attributed not just to Hailey Bieber’s massive social media following, but to a revolutionary marketing strategy centered on authentic community engagement. While many celebrity brands rely heavily on traditional paid advertising, Rhode generated an estimated $400 million in earned media value, according to Viviane Paxinos for AllBright. This approach emphasized genuine connection over transactional promotion.
Key Marketing Strategies:
- Authentic Engagement: Bieber’s personal routines featuring Rhode products felt more like a friend’s recommendation than an advertisement.
- Viral Campaigns: Initiatives like sending bath bombs with hidden Rhode products to influencers generated organic buzz and unscripted reaction videos.
- Product-as-Accessory: The viral phone case designed to hold a Rhode lip product transformed a promotional item into a must-have accessory, garnering over 460,000 likes on a single Instagram post.
- Amplifying Real Moments: Instead of overt testimonials, Rhode amplified casual mentions by makeup artists, genuine user results, and celebrity sightings, fostering a sense of discovery.
This community-first approach generated exponentially more value than traditional advertising budgets, demonstrating a profound shift in consumer engagement. It also countered criticisms that Rhode’s success was merely a “by-product of Hailey’s pop culture street cred,” proving that authentic strategy underpinned the virality.
Hailey Bieber’s Business Future and Family Values
The sale of Rhode doesn’t mean an end to Hailey Bieber’s involvement. She will continue in her role as founder, Chief Creative Officer, and Head of Innovation for Rhode, also serving as a strategic advisor to the combined E.L.F. Beauty enterprise. This ongoing involvement suggests a long-term commitment to the brand she built.
What’s Next for Rhode Under E.L.F. Beauty?
E.L.F. Beauty, known for its accessible drugstore pricing, is pivoting towards more premium skincare brands. The acquisition of Rhode allows them to scale its distribution dramatically.
- Expanded Distribution: Rhode products are set to launch in Sephora stores across the U.S. and Canada this fall, with a U.K. expansion planned later in the year.
- Product Line Growth: E.L.F. plans to scale distribution and potentially expand Rhode’s product offerings, leveraging the brand’s strong foundation.
Preserving Wealth for Son Jack Blues
In a revealing interview with WSJ. Magazine, Hailey Bieber shared her thoughtful plans for her substantial earnings. She expressed a desire to “preserve” the money from the sale for her son, Jack Blues, whom she shares with husband Justin Bieber. “I want to preserve that for my son’s future. It’s an amount of money that I have not dealt with before, so I just want to be smart with it,” she told the publication, adding, “I would like to invest it wisely.”
This forward-thinking approach underscores a broader commitment to her family’s future, as she and Justin Bieber also maintain privacy regarding their son’s public image. “Until your child can understand it and it’s possible to have conversation around it, I have no interest in putting him out there in any way,” Hailey explained, a sentiment resonating with many public figures who choose to shield their children from the spotlight, as reported by People.
Hailey Bieber: More Than a Celebrity, a Real Business Player
The Rhode acquisition solidifies Hailey Bieber’s reputation as a shrewd business strategist and a formidable entrepreneur. She has successfully leveraged her brand, built on authenticity and community, into a massive financial success in a highly competitive market. With a significant equity stake in E.L.F. Beauty and a proven track record, her future opportunities for launching or investing in new ventures are boundless. While not yet a billionaire, the sale of Rhode has undoubtedly set her on a clear path to becoming one, transforming her financial future and establishing her as a serious player in the business world.
