FaZe Clan to Merge With SPAC and Go Public at $1 Billion Valuation
FaZe Clan, a youth-centric online platform, is going to merge with special-purpose acquisition company (SPAC) B. Riley Principal 150 Merger Corp. The combined company plans to go public with a $1 billion valuation, according to The Wall Street Journal.
As part of the deal, FaZe Clan is raising $120 million through a private investment in public equity (PIPE) associated with the merger.
Pitbull is among FaZe Clan’s investors, as are other members of the entertainment and sports circles. The B. Riley SPAC has about $170 million, the Journal reported.
“The big opportunity is our direct relationship with the massive audience we have,” Lee Trink, CEO of FaZe Clan, told WSJ. “It’s a very large, very vibrant community that we’re deeply rooted in.”
FaZe Clan began more than a decade ago as a small group making montages from first-person shooter games. While it maintains a major gaming presence, FaZe Clan has branched out into sports, culture, entertainment and retail, and has more than 350 million followers combined across social media platforms.
The company’s sales this year were $50 million.
Though it started out with just gamers, the FaZe Clan roster now includes NBA star Ben Simmons, NFL quarterback Kyler Murray, rapper Lil Yachty and LeBron James’ son. FaZe Clan also has existing deals with major corporations looking to reach young demographics, including McDonald’s and the General Mills-owned Totino’s Pizza Rolls.
SPACs are often referred to as “blank-check companies.” Investors in a SPAC are not aware of how their money will ultimately be spent.
The SPAC model is to go public immediately, solicit funds from backers, and then go find companies with which to merge. The model is all the rage these days in Hollywood and beyond; even former President Donald Trump is attempting to launch a media company backed by a SPAC.
