Rhode To A Billion - Sandbox Studios

Why Hailey Bieber’s $1B Exit Proves the Power of Celebrity Brands

Three years ago, Rhode launched with a single product, a simple brand promise, and a globally recognized face in Hailey Bieber. Last week, e.l.f. Beauty acquired Rhode in a deal worth up to $1 billion—a staggering sum for a brand barely out of its infancy.

To most, it might look like another celebrity cashing in. To us, it’s confirmation of what Sandbox Studios has believed—and been investing in—for years:

Celebrity-founded brands aren’t trends. They’re a new asset class. And when paired with the right operators and capital, they move with a speed and capital efficiency traditional startups can’t touch.

The Thesis in Action: How Rhode Did It

Hailey Bieber’s playbook wasn’t built on hype. It was built on precision:

• Start narrow. Scale fast. Rhode launched in 2022 with just one product: the Peptide Lip Treatment. It sold out in hours and amassed waitlists in the hundreds of thousands. One hero SKU, $16, and a direct line to 50M+ fans.
• Built-in distribution. Hailey didn’t just endorse the brand—she was the brand. Her lifestyle, look, and voice became the campaign. This avoided the CAC trap that plagues most beauty startups.
• Hailey = marketing channel: Hailey put in the actual work and the hours providing over 100 beauty tutorials on YouTube (that’s over one a month) and thousands of social media posts. She spoke at events, podcasts, and any beauty forum that would have her. She saved costs on marketing spend and agencies by doing what was necessary to promote the brand herself.
• Content x Commerce. Rhode operated like a media company. Glazing content, viral tutorials, and behind-the-scenes labs drove emotional buy-in and constant social velocity.
• Celebrity Help. Some of Rhode’s most watched and engaged videos for the brand involved her famous husband Justin Bieber (295m followers) who not only supported his wife’s brand through involvement but truly dug into the concept and shared his own skincare journey with fans of the brand.
• Modern ops. A very lean team, world-class CMO from Estée Lauder, and early e-comm discipline meant Rhode was more than celebrity sparkle—it had enterprise value.
• Strong financial modelling and planning: Shout out to David Whitcroft, founder of Crew Finance, who was with Rhode from the beginning and is a venture partner of Sandbox Studios. No one knows CPG finance and accounting better than David and his team at Crew. This proves what we’ve been saying all along – while celebrities can provide the awareness, the team makes all the difference on execution.

The Deal: $1B in Three Years

e.l.f. Beauty will pay:

• $600M cash
• $200M in e.l.f. shares
• $200M in future performance-based earn-outs

This gives Rhode the scale of a public company and gives e.l.f. a premium brand that resonates with a younger, global audience. For investors? That’s a liquidity event at record speed—on a capital-light model driven due to celebrity reach and engagement.

What This Means For Investors

Rhode didn’t happen by accident. It’s a roadmap Sandbox Studios follows and refines across every investment:

With Fund I, Sandbox backed this thesis in brands like Kris Jenner’s Safely, Ian Somerhalder’s The Absorption Company, Snoop Dogg’s Dr Bombay, and Anna Sarelly’s Sarelly Sarelly, each moving faster and more efficiently than typical consumer plays.

Rhode proves the upside isn’t just theoretical— it’s real, and it’s happening now.