FaZe Clan is a powerhouse 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 “FAZE” to the mix.
As FaZe Clan Members Compete in Esports Tournaments and Play Duty on Twitch, the company’s not-so-secret sauce is its high frequency of branded deals. FaZe Clan goes beyond obvious collaborations like headphones and gaming keyboards, and has recently helped sell everything from Nissan cars to the crispy chicken sandwich at McDonald’s.
Proverb has named the group one of the top marketers of 2021 for a reason. It seems that every marketing executive striving to better bond with Gen Z has already asked his assistant to cut a deal. Here’s just a small sample of the FaZe Clan employees: DraftKings, Totino’s Pizza Rolls, HyperX, Takashi Murakami, Disney, the National Football League, and DoorDash.
“Historically, music has been the engine of youth culture,” FaZe Clan CEO Lee Trink . told me Proverb in 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 others who have built careers in the music industry are joining his venture. 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 also bring skin into play. The group’s new president and chief operating officer, Zach Katz, was snatched from the music industry. Even Snoop Dogg got in on the action and turned into FaZe Snoop.
The more than 90 members of FaZe Clan are divided into two main categories: content creators and professional players. Many of the content creators, such as FaZe Deestroying and FaZe Rug, have a cultural cache that their competitors don’t. Still, the group is no stranger to controversies. A former member sued FaZe Clan over contractual disagreements and a current member dismissed the LGBTQ community via social media in June, but neither has deterred the company’s ability to turn charismatic gamers into influencers and lucrative brand deals as a result. to attract.
A few months after crocheting the cover of Illustrated Sports in 2021, the group announced a planned SPAC merger valued at $1 billion. However, the unicorn horn may disappear before the company goes public. Sports Business Journal reports that an amended SEC filing from FaZe Clan brought it below the $1 billion mark.
Even a well-funded marketing machine that does everything possible to tap into youth culture (and parents’ pockets) will struggle to maneuver through the turbulent economy of 2022. The glow of a once thriving industry is fading as creator-focused startups lay off employees and influencer sponsorship feels weak.
As the threat of a recession looms, entrepreneurs on LinkedIn are blowing each other up by spreading lists of companies formed during recessions. Microsoft, Venmo and Airbnb did it, why not you? Going public during a potential downturn makes FaZe Clan’s situation even harder to navigate. The company can become an inspiring investment story or an overhyped cautionary tale.
