Mentioned in this article
- FaZe Clan has entered into a convertible loan facility worth $22.7M USD.
- The loan is convertible at a pre-money equity valuation of $220M.
- Canaccord Genuity acted as the exclusive financial advisor for this loan.
Canaccord Genuity, a Canadian investment bank, announced last week that the esports organization FaZe Clan has entered into a convertible loan facility worth $22.7M. Canaccord Genuity acted as the exclusive financial advisor to the organization for the loan. In conjunction with the loan, the lender has been given a seat on FaZe Clan’s board of directors.
A convertible loan gives the lender the possibility to convert the loan into equity at a contractually specified conversion rate and within a stated time frame. Typically, convertible loans are made to bring in cash to bridge the gap between the time when a company receives the convertible loan and another larger investment round is about to take place. Once the bigger series investment is received, the convertible loan is turned into equity.
According to the release, the loan is convertible at a pre-money equity valuation of $220M. The loan will be used for working capital and general corporate purposes.
FaZe Clan is a multifaceted organization that fields six competitive teams in various games, as well as creates entertaining content for viewers.
While some have said this investment round and the next may be used to build a headquarters and esports training facility FaZe Clan has hinted they may not be interested in such ideas.
Erik Anderson spoke to The Esports Observer about building esports facilities last August.
“I get why some of the teams are putting those facilities in place,” said Anderson. “[However], there’s ample boot camp space out there for our teams to use [while] traveling around the world. For us, we have a lot of players around the world so it is logistically harder to have something until we consolidate everybody in one place. We don’t think it’s fully necessary just yet.”
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