Rare Beauty is exploring growth options to sell the brand or hold an initial public offering, The Business of Beauty has learned, setting up what would likely be one of the biggest payouts for a celebrity beauty brand ever.

Founded by actress and singer Selena Gomez in 2020, Rare crossed $400 million in net sales in the 12 months ending in February, a person familiar with the company’s performance told The Business of Beauty. That would put the brand on an elite tier in a crowded field of celebrity-backed brands that sprouted up around the same time; only Rihanna’s Fenty Beauty, launched in 2017 has generated more sales (Kylie Jenner’s Kylie Cosmetics reportedly surpassed $300 million in annual revenue at its peak, though demand has since fallen). Rare’s sales are also global, with nearly half coming from international markets, driven by an exclusive retail partnership with Sephora in most regions.

Rare Beauty’s sales, which haven’t been reported publicly before, explain at least a $2 billion asking price or more for the brand. This too would be an outlier even in the active beauty deal space; in recent years, only Tom Ford’s $2.8 billion sale to The Estée Lauder Companies, Kering’s $3.8 billion acquisition of Creed and a handful of other transactions are in a similar playing field.

Sources close to the company told The Business of Beauty that a sale is only one of the options Rare Beauty is exploring. Other possibilities include an IPO, or a partnership with a private equity sponsor. It has hired investment banks Raymond James and Goldman Sachs to advise. Bloomberg first reported that the brand was entertaining exit options.

Rare Beauty has been fielding acquisition inquiries since late last year, but the company has not been presented with formal sale offers and has not provided financial information to prospective buyers. At the earliest, a sale or exit could happen in 2025.

In the meantime, the prospect of Rare Beauty on the auction block could put the beauty M&A market in a freeze. While a flurry of colour cosmetic brands, including Kosas, Makeup by Mario and Merit are hoping to find buyers in 2024, industry sources have indicated that Rare Beauty is by far big beauty strategics’ top pick, and that they’re willing to wait on other deals to line up their best shot at the brand.

Gomez’s line launched at the peak of the celebrity beauty boom, which saw stars ranging from Scarlett Johansson and Jennifer Lopez to countless influencers putting out their own lines. While Rare Beauty initially leaned heavily on Gomez’s relatable, often vulnerable public image, the products, including its Soft Pinch Liquid Blush, Soft Pinch Tinted Lip Oil and Positive Light Liquid Luminizer soon transcended their famous founder’s appeal.

The brand’s largely Millennial and Gen-Z customers have been taken with the beauty label’s positive messaging, and its Impact Fund, which raises awareness for mental health initiatives. The combination of products people love and a fervent fan base have boosted not only sales, but profits too: while public beauty companies including E.l.f. and L’Oréal have adjusted earnings before interest, tax, depreciation and amortisation of around 20 percent of net sales, Rare is said to have at least 35 percent.