When e.l.f. Beauty announced its acquisition of Rhode in May 2025, the headline number was $1 billion. That figure requires clarification. The actual deal structure was $800 million at closing (comprising $600 million in cash and $200 million in stock) plus up to $200 million in performance-based earnouts over three years. The distinction matters because it reveals how acquirers think about risk and value in founder-led brands.
Rhode launched in June 2022 with three products: Peptide Glazing Fluid, Barrier Restore Cream, and Peptide Lip Treatment. In eleven days, the brand hit $10 million in sales. By March 2025, trailing twelve-month revenue reached $212 million. The brand remained direct-to-consumer only, with no retail partnerships, until announcing a Sephora rollout for late 2025.
These numbers are verifiable from e.l.f.’s SEC filings and earnings calls. What they do not fully explain is how a skincare brand with ten products and no traditional advertising became the number one skincare brand in earned media value in 2024, with 367% year-over-year growth.
This analysis examines the structural decisions that enabled that outcome.
Rhode’s marketing spend reportedly hovered around 11% of revenue. For context, most direct-to-consumer brands in the beauty category allocate between 30% and 50% of revenue to customer acquisition. The difference represents tens of millions of dollars that Rhode did not spend on paid media.
The gap was not filled by luck. It was filled by Hailey Bieber’s continued visibility as the brand’s primary creative and commercial presence. Her TikTok following exceeds 15 million. Her Instagram following exceeds 55 million. When she films a ‘get ready with me’ video featuring Rhode products, the content functions simultaneously as entertainment, product demonstration, and endorsement.
A useful metric here is the marketing efficiency ratio (MER), which measures revenue generated per dollar of marketing spend. Rhode’s MER reportedly approached 9x, meaning every dollar spent on marketing returned approximately nine dollars in revenue. For comparison, a healthy MER for most DTC brands falls between 3x and 5x.
The conventional wisdom in celebrity brand building is that founders should gradually step back, allowing the brand to develop an identity independent of its famous originator. The theory is that attachment creates ceiling: the brand cannot grow beyond the founder’s personal reach.
Rhode rejected this approach. Bieber remained the face of every campaign, the star of every product tease, the voice responding to community feedback. The acquisition terms reflect how valuable this attachment became: Bieber will continue as Chief Creative Officer and Head of Innovation, plus serve as a Strategic Advisor to the combined companies. E.l.f. did not structure the deal to extract the brand from its founder. They structured it to retain her.
This suggests a revision to the conventional wisdom. For founders with genuine cultural relevance, attachment is not a constraint on scale. It is a substitute for capital.
The ‘$1 billion deal’ framing that appeared across business media requires unpacking. The headline number includes earnout provisions that may or may not be realized.
The verified structure from e.l.f.’s SEC filings: $800 million payable at closing, composed of $600 million in cash (financed through committed debt) and $200 million in newly issued e.l.f. stock (approximately 2.6 million shares). An additional $200 million is contingent on Rhode’s revenue growth over the subsequent three years.
At closing, the $800 million purchase price represented approximately 3.8x trailing twelve-month net sales of $212 million. This multiple is elevated for the beauty category but justified by Rhode’s unit economics. Reported figures suggest cost of goods around 19% of sales, delivery expenses around 15%, marketing around 11%, and general and administrative costs around 17%. This yields EBITDA margins in the mid-30s, which is unusually high for a young DTC brand.
The earnout structure is notable. It is revenue-based, not tied to profit or EBITDA targets. This signals e.l.f.’s confidence in Rhode’s growth trajectory rather than margin expansion. The acquirer is betting on the brand’s ability to continue scaling under Bieber’s creative direction, not on cost synergies from integration.
A portion of the stock issued to founders and key employees is subject to lock-up agreements, released in tranches over twelve months. This retention mechanism further underscores that the deal’s value depends on the team staying engaged.
Rhode did not run traditional advertising campaigns. No television spots. No significant programmatic display. The brand built awareness through three interconnected channels: founder content, creator seeding, and strategic collaborations.
Founder content operated as the primary awareness driver. Bieber’s personal social accounts functioned as the brand’s media channel. The content format was deliberately casual: morning routines filmed in her bathroom, product applications shown without professional lighting, direct engagement with comments and questions. This aesthetic reinforced Rhode’s positioning around simplicity and accessibility.
Notably, data from Glossy indicated that only about 15% of Rhode’s earned media value came from posts that explicitly mentioned Bieber by name. The remaining 85% came from the broader creator community: micro-influencers, skincare enthusiasts, and ordinary customers sharing their routines. Rhode cultivated this by seeding products to creators before launches, creating anticipation through exclusivity rather than paid promotion.
Strategic collaborations extended Rhode’s cultural presence beyond skincare. In September 2023, Rhode partnered with Krispy Kreme for a strawberry glazed donut-flavored Peptide Lip Treatment. Krispy Kreme simultaneously brought back their strawberry glazed donuts for a limited four-day run. The collaboration anchored Rhode to an affordable indulgence, reinforcing the brand’s ‘little treat’ positioning.
The Erewhon partnership followed similar logic. Bieber’s Strawberry Glaze Skin Smoothie became one of the Los Angeles grocery chain’s most successful celebrity collaborations, selling thousands in its first month at approximately $18 per smoothie. The partnership positioned Rhode within wellness culture while providing a physical, consumable brand touchpoint.
Both collaborations reflect a consistent strategy: associating skincare with food to lower psychological purchase barriers. Product names like Glazing Milk, Vanilla Cake Tint, and Cinnamon Roll Lip Tint evoke comfort and indulgence rather than clinical efficacy. Rhode made skincare feel like a treat rather than a regimen.
In February 2024, Rhode launched its Lip Case: a $35 silicone phone case with a molded slot designed to hold the brand’s Peptide Lip Treatment. The product sold out immediately. The waitlist reached 440,000 people.
The case succeeded not because of superior materials or innovative engineering. It succeeded because it embedded Rhode’s product into a behavior people already perform constantly: reaching for their phone. Average smartphone users pick up their devices between 50 and 100 times per day. Each pickup became a potential product interaction.
This is behavioral product design. Rather than asking customers to remember to use a product, Rhode attached the product to an existing habit. The case also created a visible signal of brand affiliation. Users who adopted the case became walking advertisements, their Rhode Lip Case visible in photos, videos, and daily life.
The cultural impact extended beyond sales. Within days of Rhode teasing the case, competing brands created parody content. Benefit Cosmetics posted a video of their Benetint taped to a phone. Colourpop proposed a ‘lip AND cheek phone case.’ A supplements brand called Hilma taped a bottle of Gas & Bloat Relief to a phone with the caption ‘For the gassy girl on the go.’ The parodies generated additional earned media while positioning Rhode as the originator of the trend.
Rhode has since expanded the phone case line with seasonal colors and a MagSafe-compatible snap-on version, extending the product’s lifecycle without requiring fundamental innovation.
Rhode’s pop-up activations became notable for their lines. At a May 2024 one-day event in West Hollywood, fans waited over five hours for access. Some reportedly paid $200 to skip the queue. A 2024 New York pop-up saw six-hour waits. E.l.f. CEO Tarang Amin noted in an interview that Rhode consumers ‘will camp out overnight, wait 14 hours in a line for a pop-up in LA.’
The pop-ups themselves were product-themed rather than geographically or conceptually abstract. The Pocket Blush launch in summer 2024 featured a yellow color palette echoing the product. The Barrier Butter launch used white. The February 2025 Lip Shape pop-up in Los Angeles adopted pink. Each activation created a sensory environment aligned with the specific product being introduced.
These events served multiple functions. They generated content (attendees posted extensively). They created urgency (limited hours, first-come-first-served wristbands). They provided early access to products before general availability. And they reinforced the brand’s ‘community’ positioning by rewarding the most dedicated customers with exclusive experiences.
The Instagram feed strategy mirrored this approach. Rhode shifted its entire feed color palette to match each launch: pink for Jelly Bean Lip Tint, brown for Cinnamon Roll Lip Tint, red and white for Candy Cane Lip Treatment during the holiday season. This visual consistency created immediate recognition and signaled to followers that something new was arriving.
In 2024, beauty creator Golloria George publicly criticized Rhode’s limited shade range, particularly for its Pocket Blush. The critique gained traction across social platforms.
Bieber’s response deviated from standard brand crisis management. Rather than issuing a corporate statement, she contacted George directly. She apologized, asked for George’s help in reformulating the products, and compensated her for the consultation. Six months later, in March 2025, George posted a video announcing that she had been ‘in the lab with Bieber’ and that the cosmetic chemist involved in the relaunch was Black. The video received 7.1 million views and 661,000 likes within days.
This response illustrates the advantage of founder-led brands in managing criticism. Bieber could engage personally, move quickly, and demonstrate accountability in a way that corporate PR departments typically cannot. The resolution turned a potential crisis into a brand-building moment while materially improving the product.
The name ‘Rhode’ sometimes generates confusion, with observers assuming a connection to Rhode Island or island-themed branding. The actual origin is personal: Rhode is Hailey Bieber’s middle name, as well as her mother’s and great-grandmother’s. Bieber initially attempted to trademark ‘Bieber Beauty’ in 2019, but the application was rejected because her husband Justin Bieber had already trademarked the Bieber name in 2010.
The name created legal complications. A New York clothing brand called Rhode (founded in 2013 by Purna Khatau and Phoebe Vickers) filed a trademark infringement lawsuit shortly after Rhode’s launch in June 2022. The lawsuit alleged that Bieber’s team had previously attempted to purchase the Rhode trademark in 2018 and been refused. After two years of litigation, the parties settled in July 2024, with terms undisclosed.
Rhode’s experiential marketing has not leveraged geographic or island themes. The brand’s activations have been product-focused, with design elements tied to specific launches rather than conceptual narratives around the name.
Rhode’s trajectory suggests a marketing concept worth articulating: attachment equity. This refers to the compounding value generated when a founder maintains active, visible, and accountable involvement in a brand over time.
Attachment equity differs from brand equity in important ways. Brand equity exists in consumer perception and can be measured through awareness, preference, and price premium. Attachment equity exists in the relationship between the founder and the community, and it appreciates through consistent presence, responsiveness, and demonstrated investment.
The components of attachment equity, as demonstrated by Rhode, include:
Presence consistency: The founder appears regularly in brand content, not just for major launches. Bieber’s TikTok and Instagram accounts function as extensions of Rhode’s marketing, with casual, frequent content that maintains visibility.
Response accountability: The founder responds personally to significant community feedback, particularly criticism. This creates asymmetric trust: customers believe the brand will hear and address their concerns because the founder has demonstrated willingness to do so.
Creative ownership: The founder is visibly involved in product development, campaign creation, and brand direction. This cannot be faked. Bieber’s participation in lab sessions, product testing, and creative shoots is documented and shared.
Exit resistance: The founder’s continued involvement becomes a condition of acquisition, as seen in e.l.f.’s deal structure. Attachment equity converts to acquisition leverage because the founder’s presence is understood as essential to the brand’s value.
For brands considering this approach, the trade-offs are real. Attachment equity is non-transferable. If the founder steps away, the equity diminishes. It also requires sustained energy: the founder must continuously generate content, respond to feedback, and remain culturally relevant. Rhode worked because Bieber possessed the cultural position, the creative interest, and the stamina to maintain this level of involvement for three years.
Not every founder can or should pursue this model. But for those with existing cultural reach and genuine product passion, Rhode demonstrates that staying attached can be a competitive strategy, not a limitation.
Rhode’s success is not fully replicable. Bieber brought existing cultural capital, social media reach, and celebrity access that most founders do not possess. The brand launched into a favorable moment for ‘skinimalism’ and clean girl aesthetics that aligned perfectly with its positioning.
However, several strategic elements transfer to brands without celebrity founders:
Behavioral product integration: Finding ways to attach products to existing habits rather than requiring new behaviors. The phone case is a specific execution; the principle applies broadly.
Scarcity at accessible price points: Rhode products are priced under $30 but positioned through drops, waitlists, and limited availability. Aspiration does not require premium pricing.
Sensorial brand language: Using food and comfort associations to make products feel like treats rather than obligations. This shifts purchase psychology from considered decision to impulse indulgence.
Experiential scarcity: Pop-ups and events that reward the most engaged customers while generating content from attendees. The marketing value comes from participation, not observation.
Visible founder accountability: Responding to criticism personally and demonstrating change. This applies whether the founder has 50 million followers or 5,000.
Rhode did not invent founder-led marketing. But the brand executed it with unusual discipline and consistency, demonstrating that staying attached can generate returns that scale, not diminish, with time.