FaZe Clan Goes Public in $725 Million SPAC Deal

Esports and media powerhouse FaZe Clan began trading publicly on the Nasdaq today, following a special purpose acquisition company (SPAC) merger with B. Riley Principal 150 Merger Corp. The brand is listed under the ticker symbols FAZE and FAZEW. The plan to go public was first announced back in October. The deal was initially expected to be valued at $1 billion, but the acquisition came in short of that at $725 million. FaZe Clan claims to be the biggest brand in gaming culture with a global fanbase of more than 500 million. With about 80% of its audience being between age 13 and 34, the brand certainly has an in with the Gen Z market. "This is a landmark event for gaming culture and Gen Z, as FaZe Clan becomes the first Gen Z native brand to go public," FaZe Clan CEO Lee Trink said in a statement. The Playbook for Turning Sports Sponsorship Into Sales "It provides us the access to capital and global profile to enable our long-term growth objectives, and for the first time gives our fans the opportunity to own a part of our future," Trink added. "As this generation rises to economic power and influence, FaZe will continue to use its voice to pioneer and innovate at the intersection of technology, entertainment and culture." Even with its success and reach, FaZe Clan is not yet profitable. In 2021, the company reported $53 million in revenue but a net loss of nearly $37 million, according to an amended SEC filing reported by Esports Insider. Those same figures from 2021 revealed that total revenues grew by 42% YoY, but net losses also grew by 28% during the same time frame. SPACs are still alive In a SPAC transaction, a private company merges with a public “blank check” company to go public. B.Riley Principal 150 Merger Corp. sent FaZe Clan a $20 million bridge loan in March. SPACs rose during the pandemic as an alternative to initial public offerings. But many have been canceled or halted, while many existing SPACs have lost significant value. What makes FaZe Clan think it can buck that negative trend? Mainly its digital-first content and young audience. “With an unparalleled level of engagement with Gen Z, FaZe represents a strong opportunity to invest in the future of digital-native entertainment," said Dan Shribman, chief investment officer of B. Riley Financial. Brands Missing Their Shot at European Soccer Digital Marketing Original content is king Over the years, esports brands have recognized that creating original content is the key to building a successful gaming and esports brand. Esports brands like Evil Geniuses have launched creator content studios in the past several years to engage with the online audience. According to FaZe's SEC filing, most of its revenues came from sponsorships. The brand has also expanded its operations into original content: Earlier this year, it launched what it called the first-ever live reality competition series, FaZe1: The Warehouse. The company had several sponsors involved in the livestream event, including sports nutrition brand Ghost, crypto platform MoonPay and Nissan. Even individual gaming creators such as SypherPK are in the process of building a 30,000-square-foot creator content studio, which will find rising streamer stars and offer video editing and content strategy services. FaZe Clan has a talent network of more than 100 personalities. This includes global celebrities, professional athletes, esports athletes and content creators, including Snoop Dogg—who is a member and sits on the board—NFL star Kyler Murray, LeBron James Jr. and more. FaZe Clan Launches Live Reality Competition Show on Twitch With New Brand Partner

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FaZe Clan Goes Public in $725 Million SPAC Deal

The interactive lifestyle and media brand is banking on its connection with Gen Z

Rafael Canton

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Rafael Canton