Wow, Rhode Just Sold to E.l.f For $1 Billion

0:00Hey business festies, welcome back to Female Founder World. we have to talk about Hayley Bieber's beauty brand, Rode. They were just acquired by e.l.f. for a billion dollars. And this is a story that is just dominating every single feed. Every time I pick up my phone, you guys are in my DMs. I'm seeing it in the group chat. And I wanted to unpack this and what we can learn, what it means for those of us out here trying to build businesses, trying to get paid, trying to build a bit of wealth for ourselves, because the brand has only been around for three years and I just think it is such an interesting story.

0:34So first of all, let's just, let's talk about the deal and dive into that a little bit more because, you know, you see the headlines, a billion dollars and yes, that is what they're getting for the sale, but that means$600 million in cash. Then they get$200 million in Elf Cosmetics shares and another$200 million if Rode hits some milestones over the next few years. So it's not, it's not a billion dollars up from cash right now. That's kind of how the deal is structured. And we also know that Rode did$212 million in net sales over the last financial year. So when I look at the math and think about, okay, how are beauty brands like Rode getting valued right now?

1:12That means that the valuation is about four times the last 12 months of sales or like 3.8 to be more specific. And I think that's very interesting for those of us out here building beauty brands. Obviously, this doesn't mean Hayley is getting a billion dollars or like even, you know,$600 million. She's got two co-founders, they have investors, but let's say, and I am spitballing here, I'm speculating, but let's say she has 15 % of the business, which I would say is definitely at the higher end for this kind of celebrity deal. That's 90 million cash before tax plus stock and the potential for future payouts if road hits those milestones that Elf has set.

1:51I'm also curious about why this particular celebrity brand just catapulted to success so quickly and what they did ride because so many celebrity brands that we see out there seem to flop. And one number really stuck out to me when I was reading through the press release that Elf dropped about this partnership. They said that Rode is the number one skincare brand in earned media value, or they were in 2024, and that they grew by 367 % year over year in earned media value. And earned media value, that just literally means like people talking about you that you haven't paid for. So not ads, you know, that's might be PR, press, organic, that kind of thing.

2:33and that's really interesting because that is the Hayley Bieber effect and I dug into their website traffic they're getting about 1.2 million people to the site every month 45 % of that is like just people typing in road.com or roadskin.com or whatever their url is 33 % of that is organic traffic and then 8 % is paid so I think that just kind of speaks to the impact that someone like Hayley Bieber being associated with the beauty brand can have for visibility and for demand. The CEO at Road, this I thought was interesting. The CEO at Road is actually the same guy who led the IPO of Jessica Alba's business, the Honest Company.

3:15And when they IPO'd, it was at a$1.44 billion valuation. His name is Nick Vlahos and he went on the Glossy podcast a couple of years ago to just share his playbook on building brands that can stand the test of time. And the episode itself is pretty long. It's pretty dense. And so no judgment if you cannot be bothered listening to the whole thing. I'll just share some of the key stuff that he said on the episode, because you can bet that is what they're rolling out at Rode as well. So one of the things that he said is really important is scaling a DTC business into an omni-channel business. And we've seen this happened with Rode.

3:55They built up this really strong brand by really controlling everything. They had all sales going through their website. It was all direct. And then after a few years in the last month, they've announced that they're going to be launching into all Sephora US and Canada stores in the fall. And then they're going to roll out into Sephora UK by the end of the year. Another thing that the CEO says that he does is prioritizing investment in brand. and that obviously makes sense as well. We know that consumers are not just buying products, they are buying into brands and being a part of something and I think that is, of course, something Rode has done really, really well.

4:33Investing in international expansion, he said, is really important, which is interesting because Rode is not super available internationally at the moment so we can just bet that that's going to be happening. And then another thing he said is investing in vertical integrations. That basically just means like owning your suppliers or your retail locations so that you can have greater control over your supply chain. Okay, business besties, let's switch gears for a second. Real quick, I want to talk to you about this season's presenting sponsor, Vistaprint. They are sponsoring this entire season of the Female Founder World podcast and we love a supportive sponsor.

5:11so much so that we're actually working with Vistaprint ourselves to create the merch and all of those beautiful event perks that you know and love from our in real life female founder world events. If you haven't heard of Vistaprint, here's what you need to know. Vistaprint helps all kinds of business owners print all kinds of marketing products like super professional business cards, fun merch, eye-catching flyers and brochures and a whole bunch more and it's all completely custom. So you can do whatever you want. Whatever you're imagining right now, Vistaprint can print it. And if you're wondering if you're ready to be a designer girly, their easy to use website makes it super simple.

5:53Plus they have designers on hand to help you if you really need it. Right now, Vistaprint is giving all female Founderworld podcast listeners a little something, 25 % off your first order at vistaprint.com. Use the code FFW25 at checkout and step up your branding game. We put a link in the show notes if you want to learn more. If you want to keep talking about this, let's jump into the group chat. I'll put the link in the show notes to download the app. It's free to be in there. I am so fascinated by just the absolute rocket ship that is this brand and how quickly it's grown. And you know what?

6:31I've seen a lot of comments come in and a couple of DMs as well, just pulling out the Nepo baby line. Like, yes, Hayley Bieber is famous. She's got insane privilege. Justin Bieber is her husband, all of these things. And we could spend our time and energy talking about that, but we all know that. And so instead I think it's actually much more useful to look at this and think, what can I get out of this story? What can I learn from the other co-founders, from the CEO? What can I take away as I'm building my own business? And what does that mean for the rest of us out here? If you liked this episode, please drop a review.

7:04I literally get a notification on my phone every time one of you leaves a nice review and it makes my day. Chat to you next time. I just wanted to jump in and end the show with a quick thank you and shout out to all of our paid Business Besties subscribers. Business Besties bypass literally years of networking by getting access to all of the people that you need to build your dream business. You also get invited to exclusive monthly group business coaching call sessions where you can speak to experts and founders and ask them all of those questions that you just can't Google. You can cancel anytime.

7:40Head to bestie.femalefounderworld.com or click the link in the show notes for more.