FaZe Member is powerhouse that is on track to do the unthinkable for an esports organization: go public as a NASDAQ-listed company. Later this year, you may be able to diversify your investment portfolio by adding “PHASE” to the mix.
While members of the FaZe clan compete in esports tournaments and play Call of duty on Twitch, the company’s not-so-secret sauce is its high frequency of brands. Going beyond the obvious collaborations like headsets and gaming keyboards, FaZe Clan has recently helped sell everything from Nissan cars on a crispy chicken sandwich at McDonald’s.
AdAge He named the group one of the best marketers of 2021 for good reason. It seems like every marketing executive looking to better connect with Gen Z has already asked their assistant to try to close the deal. Here’s just a small sampling of FaZe Clan’s partners: DraftKings, Totino’s Pizza Rolls, HyperX, Takashi Murakami, Disney, the National Football League and DoorDash.
“Historically, music has been a driver of youth culture,” said FaZe Clan CEO Lee Trink AdAge 2021 “But now gaming is youth culture.” The sentiment is bombastic and not surprising to hear from someone who runs an esports media company, but he’s not wrong.
Trink cut his teeth as president of Capitol Records, and his venture is joined by others who have built careers in the music industry. Jimmy Iovine, co-founder of Interscope records, not only invested in FaZe Clan, but also helped lead a funding round for it in 2020. Artists like Offset are also putting skin in the game. The group’s new president and chief operating officer, Zach Katz, is retired from the music industry. Even Snoop Dogg got in on the action and transformed into FaZe Snoop.
FaZe Clan’s over 90 members are divided into two main categories: content creators and professional players. Many content creators, like FaZe Deestroying and FaZe Rug, have a cultural cache that their competitors lack. Despite this, this group is no stranger to controversy. A former member sued FaZe Clan over contract disputes and a current member disowned the LGBTQ community in June over social media, but neither has deterred the company’s ability to turn charismatic players into influencers and attract lucrative brands as a result.
A few months after he grabbed the cover Sports Illustrated In 2021, the group announced a planned SPAC merger with a valuation of one billion dollars. However, the unicorn’s horn may disappear before the company goes public. Sports business journal reports that an amended SEC filing from FaZe Clan has put it under the $1 billion mark.
Even a well-funded marketing machine doing everything possible to tap into youth culture (and parents’ pocket money) will have trouble maneuvering through the turbulent economy of 2022. The luster has begun to fade from a once-booming industry as creator-focused startups lay off employees , and sponsorships feel weak for influencers.
As the threat of a recession looms, entrepreneurs on LinkedIn are shutting each other down by spreading lists of companies formed during the recession. Microsoft, Venmo and Airbnb have done it – why can’t you? Going public during a potential downturn makes the FaZe clan’s situation even more difficult to navigate. The company could become an inspirational investment story or an over-hyped cautionary tale.