Esports Brand FaZe Clan Announces Plans for Public Offering via $1B SPAC Deal – What Sets It Apart?

eSports Titans FaZe Clan on the Intersectionality of Gaming, Content and Brand Partnerships, Advertising Week New York 2021, Great Minds Stage presented by Roundel, Hudson Yards, New York, USA - 21 Oct 2021
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Entertainment and esports company FaZe Clan, a digital content platform created for the Gen Z and millennial generations, is combining with a special-purpose acquisition company (SPAC) to go public with a $1 billion valuation. The company will be listed on NASDAQ under the ticker symbol “FAZE.”

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The Pitbull-backed company said it had entered into a definitive merger agreement to combine with SPAC B. Riley Principal 150 Merger Corp. Through the proposed business combination, FaZe Clan is positioned to become one of the only digitally native, youth-focused lifestyle and media platforms publicly traded on a U.S. national exchange, according to an announcement.

The company says it has a social media reach of more than 350 million and intends to use the proceeds of approximately $291 million to fund FaZe Clan’s global multi-platform growth strategy spanning content, gaming, entertainment and consumer products, including potential acquisitions.

Jonathan Anastas, chairman of Alpha Tech, told GOBankingRates that the FaZe Clan announcement confirms several sports and gaming-led trends.

First, the shift in generational-focus, as categories such as esports and MMA over-index for Gens Y and Z versus traditional sports.

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“As ad and sponsor dollars shift, so will their valuations,” he said. “Secondly, and related to generational preferences, streaming is expected to have a 20%+ CAGR [compound annual growth rate] with esports expanding at a an 8-10% CAGR. Organizations that focus on these high growth spaces will benefit.”

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Anastas added that another factor is that overall, sports valuations and rights deals appear to be increasing at a rapid rate as we move past pandemic challenges in the West and audiences return at record rates.

“Lastly, FaZe has shown clear thought leadership, scale leadership and the highest levels of cultural impact in the category. The biggest rewards and valuation multiples always go to the clear leaders,” he said.

Lee Trink, CEO of FaZe Clan, said in the announcement that the company, in its short history, has “evolved from a disruptive content generator to one of the world’s most decorated and successful esports franchises, and now into one of the younger generations’ most recognized and followed brands globally.”

“We believe FaZe Clan is becoming the voice of youth culture, a brand that sits at the nexus of content, gaming, entertainment and lifestyle in the digital-native world,” he added.

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The company’s other big-name investors include actor Chris O’Donnell, chair and CEO of Epic Records Sylvia Rhone, and rapper Yo Gotti.

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Last updated: October 26, 2021


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