Skincare brand Rodan + Fields secures $75m, shifts business model
Skin care brand Rodan + Fields (R+F) has secured $75 million in new funding from its current minority investors, prompting a significant shift in its business model.
Transaction snapshot
Deal value: $75 million
Deal multiples: N/A
Deal type: Funding round
Investors: TPG, Ardian and AustralianSuper
The investment aims to strengthen R+F's capital structure and financial position. The transaction is expected to close later this year, though specific details remain undisclosed.
This funding round comes at a crucial time for R+F. The company is moving away from its multilevel direct-selling model to an affiliate program, effective 1 September. This strategic shift involves eliminating about 100 roles, following 76 layoffs at its Bay Area office in September 2023.
The new business model reflects R+F's response to changing market dynamics. CEO Dimitri Haloulos cited evolving consumer trends and information-seeking behaviours as key drivers for the change.
R+F's financial struggles have been evident. In May, Moody's downgraded the company to its weakest rating, citing declining consultant numbers and changing consumer shopping habits. Once a billion-dollar business, R+F has faced increasing competition from TikTok Shop, indie brands, and Amazon.
The company's investment history includes a strategic minority stake from TPG in spring 2018. Founded in 2000 by Proactiv creators Dr Katie Rodan and Dr Kathy Fields, R+F was briefly owned by Estée Lauder before being repurchased by its founders in 2007.
With this new funding, R+F aims to revitalise its business. The company recently expanded into hair care and launched a successful lip-plumping oil. Haloulos hinted at another product launch soon, signalling the company's efforts to diversify and strengthen its market position.
