FaZe Clan, an esports conglomerate, announced on Monday that it plans to enter the public markets in a deal involving a merger with a special acquisition company, or SPAC, that would value it at approximately $ 1 billion.
FaZe Clan, founded in 2010, is an influencer marketing agency, e-commerce company, and esports team all rolled into one. (CEO Lee Trink once put it this way: “Dallas Cowboys meets Supreme meets MTV.”) This will be one of the first high-profile esports companies to go public – and it will likely catch the attention of retail traders who helped fuel the SPAC frenzy. …
Mr. Trink is a former Hollywood entertainment manager who worked with Kid Rock. The company’s 85 influencers, who live together at its California gaming headquarters, create viral videos on social media, compete in professional gaming leagues for money and praise, and build a loyal fan base. FaZe built on this by launching an online store and branded merchandise, as well as signing promotional deals with the likes of Burger King.
SPACs are unregistered companies that first go public with the aim of finding a private company to merge. This could be a way for small companies to go public, by allowing them to bypass the traditional regulatory controls that go with an initial public offering.
“We didn’t spend so much time looking for a traditional IPO strategy,” Trink said in an interview, noting that the SPAC deal allows FaZe Clan to talk about future opportunities as it prepares for a public offering, while a traditional IPO would not.
FaZe, which is unprofitable, generated about $ 38 million in revenue last year and is expected to exceed $ 50 million this year. Mr Trink said FaZe will use SPAC to “double” the content.
“This is the beginning of the further ascent of the games into the spirit of the cultural time”, he added.
The $ 176 billion video game industry surged during the pandemic, although some fear sales could slow as the pandemic eases. Esports is expected to be a billion dollar business this year; Evil Geniuses esports team has already received investment from China’s Fosun Sports Group, which valued it at more than $ 250 million.