The first market test for the creator economy 📈; Crypto has an insider trading problem 🤕; Starling Bank proves that challenger banks can be profitable too 💸

Good Morning FinTech, 22 July

Good day Everyone,

And happy Friday! You made it - congrats 🥳 But don’t relax just yet as today’s issue is super interesting. We’re going to look at the first market test for the creator economy (+ why it matters & what it has to do with FinTech), crypto that has an insider trading problem, and Starling Bank proving that challenger banks can be profitable too (+ getting back to the challenger banks’ strategy triangle 📐). So let’s jump straight into the intriguing stuff:

The first market test for the creator economy 📈

The debut 🔔 Digital entertainment and esports brand FaZe Clan began trading on the Nasdaq Wednesday after completing a SPAC merger in a deal valued at $725M.

More on this 👉 You might never have heard of them before, but FaZe Clan launched as a gaming YouTube channel in 2010. Today, FaZe is an esports and media company with 93 members (including Snoop Dogg). In May, Forbes ranked it the fourth-most-valuable esports company. That’s quite something!

Interesting timing ⏰ FaZe’s debut comes when public offerings and SPACs have been struggling. Given the inauspicious macro environment, many planned SPAC deals have been canceled or put on hold (probably indefinitely). We can remember that SPACs boomed mid-pandemic, accounting for ~70% of all IPOs last year. DraftKings, Virgin Galactic, and Opendoor are just a few that went public through a SPAC. Now, it seems that the oversaturated market has lost its steam and is struggling with huge losses.

That said, it’s not surprising that FaZe stock plunged 24% on its first trading day. For the perspective, it was planning to go public last year in a $1 billion deal, but that obviously didn’t age well.

Why does this matter & what does it have to do with FinTech? 🤔 Lately, I’ve been speaking and writing more and more about the creator economy that spans from cards & neobanks for gamers to influencers-led VC funds and NFT/crypto projects focused on creators/influencers, among other things.

FaZe going public is the first market test for the creator economy to show how much is it actually worth. Here’s the takeaway: