FaZe Clan Is Going Public Via SPAC: What Investors Should Know

One of the most popular esports teams in the world will become a publicly-traded company via a SPAC merger announced Monday morning.

The SPAC Deal: FaZe Clan announced a merger with B. Riley Principal 150 Merger Corp BRPM Monday valuing the company at an equity valuation of $1 billion.

The company will be known as FaZe Holdings Inc with the ticker FAZE on the Nasdaq after the merger is completed.

About FaZe Clan: Founded in 2010, FaZe Clan is a leading digital content platform targeting Gen Z and millennial fans with huge brand recognition in the esports industry.

FaZe Clan has 10 competitive esports teams that have won 30 worldwide championships and participate in some of the biggest esports leagues.

FaZe Clan has a social media reach of more than 350 million followers. The company creates premium content from its teams and sells merchandise and consumer products. FaZe Clan ranks third for individual sports teams' “cross-platform actions,” trailing only the Los Angeles Lakers and Golden State Warriors of the NBA.

The merger will make FaZe Clan one of the only digital, youth-focused lifestyle and media platforms to be publicly traded, according to the company.

The company counts 80% of its audience between the ages of 13 and 34, a key advertising demographic. In comparison, the NBA has 45% of its fan base under the age of 34, 37% for the NHL, 29% for the NFL and 24% for MLB.

“In our short history, we have 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,” FaZe Clan CEO Lee Trink said.

The company roster of talent includes over 85 “influential personalities” across the gaming industry and content creators. Included in the roster are NFL player Kyler Murray, basketball prospect Lebron James Jr., and musicians Lil Yachty and Offset.

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Growth Ahead: FaZe Clan plans on using proceeds from the SPAC merger to fund its “multi-platform growth strategy.”

The company said it will “expand its digitally native global multi-platform presence across content, gaming, entertainment, consumer products and the metaverse.”

Opportunities listed by the company include subscription services, fan clubs, real money gambling, live events, virtual dining concepts, game publishing partnerships and metaverse/NFTs.

The monetization per user for FaZe Clan is lower than other major sports leagues, which could be an opportunity for the company going forward.

Traditional sports have seen viewership decline in recent years, according to the company’s presentation. Esports viewership was up 10% year-over-year in 2020.

FaZe Holdings sees revenue hitting $50 million in fiscal 2021 and growing 82% year-over-year to $91 million in fiscal 2022. The company projects fiscal 2023 revenue at $188 million and a positive adjusted EBITDA of $13 million for 2023.

BRPM Price Action: BRPM shares are up 15% to $11.24 on Monday.

Image: FaZe Clan