Model-turned-entrepreneur Hailey Bieber made global headlines in April when reports that her skincare and cosmetic brand, Rhode, hired investment banks JPMorgan Chase and Moelis to explore a potential exit were made public. Bieber’s isn’t the only young beauty brand courting investment: Rare Beauty, Merit, Makeup by Mario, Glossier, Kosas, One/Size Beauty and IGK Hair have all reportedly engaged advisors this past year to explore their options.
Despite the swell of brands considering selling off all or part of their business, the beauty mergers and acquisitions environment has yet to return to the highs seen from the late 2010s through 2022, both in terms of deal volume and valuations. A crucial factor? A growing number of deals from that era have quite simply failed to live up to inflated expectations. “Multiples were a bit frothy from 2017 into 2021,” says Andrew Charbin, managing director of PWC corporate finance in New York. “Many strategic buyers paid big prices for assets that were at peak-performance levels, but many of these acquisitions have not translated into long-term value for the strategics.”
To make matters worse, several of these beauty conglomerate strategic buyers made big bets on China. This tactic had not been yielding the expected returns even before the tariff announcements and was further impacted by substantial headwinds in travel retail, which was previously a major revenue stream for many large players.
With strategic buyers growing increasingly selective (this group has historically paid a median of 1.2 times more for brands than private equity players per company filings, whose business models necessitate a more near-term focus on return on investment), 2023 and 2024 passed with only the most attractive — or attractively priced — deals getting done. Hopes that 2025 would mark the return of a white-hot M&A market dimmed after President Trump’s ‘Liberation Day’ tariff announcements sent US equity markets into a tailspin.
Deals slowed down in 2024, but investors and analysts are buckling up for a busy year of M&A activity.
In the aftermath, several sell-side M&A and refinancing processes have been put on hold or have delayed launching to investors as companies, equity investors and lenders alike reassess potential risks. It’s still early to say if beauty brands will face tougher financing all year, but lenders are already tightening terms for brands that sell non-essential products people usually buy when they have extra money such as beauty or fashion, especially those with direct exposure to tariffs, says Ben McArthur, VP of private credit at TCW. He adds: “Since the tariff announcements, opening leverage for the consumer discretionary sector [lenders are now offering less EBITDA/debt than they were before the tariff announcements] has reduced by a quarter to a half-turn from where the market was clearing prior to Trump’s ‘Liberation Day’ announcements.” As a result, beauty brands are likely to face an uphill battle when it comes to getting attractive lending terms, a crucial factor in the deal-making process.
Many remain hopeful that the remainder of 2025 will offer more fertile ground for deal-making. “We are seeing a very rich pipeline of interesting brands and also interested investors in the beauty category,” says Federica Levato, senior partner at management consultancy Bain Co. Levato doesn’t expand on the brands, but notes, “We may be experiencing global uncertainty, but we believe that the beauty industry has proven to be not only resilient during macroeconomic crises or uncertainties, but also sustains a decent level of growth and development after a crisis.”
Here’s a look at some of the hopefuls.
Rhode
The brand: Rhode delivers minimalist, high-performance skincare and cosmetics focused on barrier repair and the now iconic ‘glazed doughnut skin’ aesthetic. Launched in 2022, the brand reportedly reached nearly $200 million in annual revenue within just two years, driven by global expansion across the UK, Canada and several EU markets in 2023, as well as a successful entry into colour cosmetics with lip tints and blush. Per influencer marketing tool CreatorIQ, Rhode’s earned media value (EMV)* soared 366 per cent year-on-year to $248 million in 2024, fuelled by viral moments, including lip gloss phone cases, buzzy NYC and LA pop-ups, and founder Bieber’s personal social engagement.
The investor perspective: Rhode’s swift ascent, strong brand identity and still unrealised opportunity to enter broader distribution via retail partnerships, make it an attractive acquisition target. “Hailey Bieber and her team have done a terrific job of being able to produce skincare products that resonated with the consumer, very high-repeat-rate items, with good margins,” says Nicole Quinn, partner at investment firm Lightspeed Ventures. “It’s a brand that investors respect.” Rich Gersten, co-founder and managing partner at investment firm True Beauty Ventures, says the primary consideration for investors will be whether this three-year-old brand’s explosive growth will stand the test of time.
Rare Beauty
The brand: Founded in 2020 by Selena Gomez, Rare Beauty centres on inclusivity and mental health advocacy, aligning brand marketing campaigns with its Rare Impact Fund and events like the Rare Impact Benefit and Mental Health Summit, which helped drive $172 million in EMV for Q1 2025, up 17.5 per cent year-on-year. The brand is sold both direct-to-consumer (DTC) and via retailers including Sephora (global), Space NK (UK) and Blush Bar (Colombia, Chile). Its bestselling product? The Soft Pinch Liquid Blush, which sold every three seconds in 2024, according to the company. Per media reports, Rare surpassed $400 million in net sales in the 12 months ended February 2024, though the brand declined to confirm figures.
The investor perspective: Rare Beauty’s scaled revenues, high-replenishment hero products and authentic brand ethos will make it attractive to any buyer, but the high valuation it could command will shrink its pool of likely acquirers. “Most deals happen in the $50 to $500 enterprise value range, where lots of buyers and funds can transact and still have room to grow for future exit,” Gersten says. “My sense is that Rare has potentially gotten too big.” Profitable brands that have achieved or exceeded $150 million in sales, he explains, will exceed that $500 enterprise value sweet spot, which reduces the number of buyers who can write that size of a check. Going public could be an option for a brand of Rare’s stature, but Gersten cautions that “not a lot of history shows successful mono-brand public offerings in beauty”.
Merit
The brand: Merit offers pared-back, clean beauty products, appealing to consumers who value simplicity, quality and sustainability over trend-focused cosmetics. The brand is sold DTC, as well as in Sephora at Kohl’s shop-in-shops with a 50/50 even distribution between retail and online. Unlike many other colour cosmetics brands, Merit leveraged collaborations with elevated fashion and jewellery brands, such as Proenza Schouler, Completedworks and Tove, for new takes on its signature makeup bag. Merit has since expanded into Australia and Europe, and maximised its product portfolio with fragrance and SPF. The brand said it had made “well over” $100 million in revenue in 2024 alone.
The investor perspective: Merit’s clean aesthetic, growing sales and lack of reliance on trends will make it appealing to acquirers, though its ability to extend into additional categories (such as fragrance) will be thoroughly vetted by potential investors. “I think Merit’s done a great job scaling minimalist, clean-with-performance positioning, to a slightly older demographic, with a strong management team in place,” Gersten says. The brand’s concentration in Sephora, like most of the brands in this article, may read as a risk to some investors, however. “I don’t think of it that way, but some investors might.”
Makeup by Mario
The brand: Founded in 2020 by celebrity makeup artist Mario Dedivanovic (whose role as Kim Kardashian’s makeup artist propelled him to stardom), Makeup by Mario offers cosmetics and tools inspired by professional artistry. With a loyal following and celebrity support, including the Kardashian-Jenner clan, the brand was projected to earn between $150 million and $200 million in 2024, according to media reports (though the company declined to confirm). Recent global expansion brought the brand to Southeast Asia, as well as further locations in Europe and the Middle East, totalling 2,100 doors worldwide. Its EMV rose 58 per cent year-on-year to over $408 million in 2024, powered by the launches of its SurrealSkin Setting Powder, SuperShine Lip Gloss and additional blush shades.
The investor perspective: Makeup by Mario’s growth trajectory and strong consumer base are attractive (the brand is currently working with JPMorgan Chase for its sale), though its emphasis on achieving trending looks may be a consideration for buyers. “As an investor, I’m always looking at whether the brand has had that meteoric rise, but more importantly, has shown consistency,” Quinn says. “Consistency is king in this market, and Makeup by Mario is one that people always point to as a terrific product, with consistent growth, gradual margin improvement and a wide array of people buying it, from experts and professionals to the everyday consumer.”
Glossier
The brand: Founded in 2014 by Emily Weiss, Glossier redefined modern beauty branding with its DTC approach, stripped-back packaging and community-first ethos. Its debut — spun out of Weiss’s popular beauty blog Into the Gloss — ushered in a wave of millennial-focused, socially savvy beauty startups. While the brand once stood almost alone in its category, Glossier now faces stiff competition from newer brands catering to Gen Z tastes. In 2023, the brand transitioned from being online-only to entering physical retail via Space NK and Sephora, expanding its footprint to over 700 offline points of distribution globally.
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The brand declined to confirm financials, but full-year 2024 revenue was between $200 million and $250 million, per reports. Its EMV reached $89 million in 2024 (up 25 per cent from the year prior), though that number remains lower than top performing brands such as Rare Beauty or Milk Makeup. Glossier has also benefitted from significant investor backing, having raised more than $266 million to date, with a $1.8 billion valuation in 2021.
The investor perspective: Glossier’s brand recognition remains a strength, though growing competition, shifting consumer preferences and a distinct association with the ageing millennial generation present challenges. “Glossier is one that we [at Lightspeed Ventures] looked at during all the early rounds. We thought Emily [Weiss] and [former president] Henry [Davis] had built a terrific business. Now, they may not have had the exact consistency that Makeup by Mario has had, but in any great journey, there are many zigs and zags along the way,” Quinn says. She adds that the key to a successful deal for the brand will be proving that it can be loved by more than one demographic. “Investors will want to make sure it’s one that ages with the customer across skincare and cosmetics and can have a consistency of revenue growth,” Quinn says.
Kosas
The brand: Founded in 2015 by Sheena Zadeh, Kosas delivers clean, science-backed makeup that combines skincare benefits with colour cosmetics and is primarily known for its inclusive shades (38 in its Revealer Concealer and 36 in the Revealer Foundation). Kosas is sold DTC and at retailers Sephora, Credo Beauty and Bluemercury in regions including the UK, Southeast Asia and the Middle East. Kosas leans heavily into user-generated content (UGC) and TikTok reviews, using behind-the-scenes content and targeted influencer partnerships to highlight product efficacy and transparency. Experiential activations, like its branded SUVs and oversized product replicas at Coachella 2025, also play a key role (that effort alone generated $3.61 million in EMV). Kosas reached $344 million in EMV in 2024, up 94 per cent year-on-year, reflecting its strong momentum. Retail sales reportedly hit $120 million in 2023, though the brand declined to comment.
The investor perspective: Kosas’s clean formulations and growth make it a compelling acquisition target, though intensified competition in the clean beauty space may give some investors pause. “Kosas has been able to stand the test of time,” Quinn says. “It’s been around for over 10 years, but the brand still hasn’t exited this exciting area. It has been pretty consistent, and everything I’ve seen around their revenue growth has been really consistent. They haven’t had the ups and downs [in revenue sales] and they have managed the business really well.” Gersten says Kosas’s strong affiliation with skincare and its benefits may give the brand a further edge over pure-play colour cosmetics players.
IGK Hair
The brand: IGK Hair, launched in 2016 by a team of celebrity stylists drawing on diverse city influences (NYC, LA and Miami), offers trend-driven, high-performance haircare aimed at making aspirational styling accessible. IGK’s mass-tige positioning makes it a standout. According to media reports, the brand reached $80 million in revenue in 2024, though the brand declined to confirm financial estimates. This growth has been fuelled by social media engagement and influencer partnerships — the brand delivered an EMV of $49 million in the last 12 months. Additionally, IGK’s salons in Miami, New York and Las Vegas serve as both retail spaces and experiential hubs, allowing customers to engage directly with the brand’s products and ethos; it’s also available DTC and via Ulta Beauty, Sephora, Sally Beauty and Saloncentric.
The investor perspective: IGK Hair’s innovative product line and rapid growth make it an attractive acquisition target; however, the competitive haircare market may be seeking brands with more patented ingredients than styling SKUS. “Everybody wants to find the next K18. It’s a unique brand with unique technology that delivers on efficacy,” Gersten says. However, he adds that haircare as a category is experiencing strong growth, “so I would expect to see continued M&A activity there”.
One/Size Beauty
The brand: One/Size Beauty, launched in 2020 by influencer Patrick Starrr, lays emphasis on high-performance the products and techniques (such as baking to set one’s makeup) used by Starrr himself. Since its inception, One/Size has experienced significant growth. Per media reports, in fiscal 2024, the brand generated approximately $130 million in revenue. A standout product, the On ’Til Dawn Mattifying Waterproof Setting Spray, has become a bestseller, with one unit sold every seven seconds, according to the company. EMV jumped 104 per cent year-on-year to $356 million in 2024, bolstered by strong influencer content and activations like the Coachella ‘Prep, Set, Lock’ station ($3.15 million in EMV). One/Size’s retail footprint includes DTC sales as well as a global retail partnership with Sephora.
The investor perspective: One/Size Beauty’s strong brand identity and impressive growth trajectory make it appealing to potential buyers. However, its niche in high-performance makeup looks will have to prove broad-based appeal as trends evolve. “It’s very big, and it’s very profitable from what I understand,” Gersten says. “Patrick Starrr has obviously had credibility and permission to play in makeup given the size and success of the business.” He adds, though, that investors may want to kick the tires a bit more around the business’s reliance on their founder’s personal brand.
The verdict
The fate of Rhode, Rare, Kosas, Merit, Makeup by Mario, IGK Hair and One/Size in the market may be further complicated by the backlog of beauty deals from years prior. “When I look at the beauty M&A market, you have a lot of supply — a lot of brands seeking exits — and you don’t have as much demand from several buyers, especially on the strategic side,” Gersten says.
It might not be this year, but bankers believe a return to superlative multiples could be on the horizon for the best and brightest brands. “I think we will see double-digit multiples again in the future, for sure, but the number of transactions [from beauty brands in general] may be fewer, and those that do take place will be more meaningful in terms of the calibre of the target asset acquired,” PWC’s Charbin says.
One thing is for certain — this year, the competition is stiff.
*CreatorIQ’s earned media value is a proprietary metric that quantifies the estimated value of digital earned media by assigning a monetary value to social media posts based on platform type and user engagement. The calculation considers the effort required to create content on different platforms and the level of audience interaction, such as likes, comments, shares and views, to reflect the brand lift driven by creators.
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