Kim Kardashian, Jay-Z, Oprah, Rihanna, Paul McCartney, Steven Spielberg and George Lucas are gonna have to make room for a new member of the celebrity billionaires club.
Thanks to her booming beauty empire Selena Gomez is almost certainly a paper billionaire right now, OR she will be one any minute.
Selena entry to the celebrity billionaire club will happen thanks to the company she founded, Rare Beauty. Rare Beauty is on pace to generate at least $300 million in revenue in 2023. And while most celebrity makeup brands are actually partnerships with a large, majority-owning company, Selena is the founder and 100% owner of Rare Beauty.
(Photo by Pascal Le Segretain/Getty Images for SEPHORA)
Rare Beauty Leads To Rare Fortune
Selena Gomez launched Rare Beauty in September 2022 as a mission-driven makeup line.
The company actually has two primary missions. The first is to produce accessible and beloved products that are available at moderate prices. Most Rare Beauty products range in price from as low as $5 to around $30 at the higher end.
Secondly, 1% of all revenue is deposited into Rare Beauty’s in-house Rare Impact Fund. The company also puts on fundraising events, including one at the White House in 2022 that raised $500,000. Between fundraising events and 1% revenue accruals, to date Rare Beauty has raised $5 million and donated $2 million. The company plans to raise and donate $100 million over its first 10 years, with 70% going to BIPOC-led organizations.
In 2022, Rare Beauty generated at least $100 million in revenue. In 2023 the company is reportedly on-pace to triple 2022 revenue, implying at least $300 million will be earned this year.
Beauty companies are typically valued at a 3-10X multiple of revenue, with fast-growing companies landing on the higher end of that range. If Rare Beauty is performing at a $300 million run-rate right now, on the low end of the range it is currently worth $900 million. On the high end, it’s worth…
$3 billion
As a comp, when we officially confirmed Rihanna’s billionaire status in August 2021, it was largely based on the value of her makeup company Fenty Beauty. At that point, it had been confirmed that Fenty Beauty was generating around $500 million in revenue and was worth $2 billion overall. Rihanna owns 50% of Fenty, which meant $1 billion could be tacked-onto Rihanna’s net worth.
As you may have just calculated, if Fenty is generating $500m per year and is worth $2 billion, it is getting a 4x revenue multiple. At that level, assuming Rare Beauty is generating $300 million, Selena’s company is worth $1.2 billion today. She has no partners.
And keep in mind, Rare Beauty is just one pillar in Selena Gomez’s growing business empire. In addition to being a highly-successful actress and singer, she has produced several shows for streamers such as Netflix and Hulu, has a lucrative partnership with Puma and is one of the most-followed people on social media. On Instagram alone Selena has over 427 million followers. The only people on the planet who have more followers on Instagram are
Lionel Messi – 479 million
and
Cristiano Ronaldo – 596 million
Oh… and Rare Beauty isn’t her only company!
Selena is the co-founder of a mental health startup called Wondermind. In August 2022 Wondermind raised $5 million at a $100 million valuation. Serena Williams‘ venture fund, Serena Ventures, led the round alongside Lightspeed Venture Partners and Sequoia Capital. Wonderkind, which positions itself as a “mental fitness” company, produces social media channels, web content, a newsletter, a podcast and more.
Just to safe, we now estimate Selena Gomez’ net worth at $800 million. We will officially mint her billionaire status once we get confirmation that Rare Beauty’s value is at least $1 billion or more.