Snapchat’s parent company Snap raised billions of dollars through its successful IPO, and as always, it benefited super-rich investors and bankers. However, with these usual investors, the tech IPO also helped a school make millions of dollars, according to the BBC.
Story behind the investment in Snap
The school located in Mountain View, California is Saint Francis High School, and its president, Simon Chiu, wrote a letter to parents informing them about this pleasant news.
In his letter, Mr. Chiu said, “The school’s investment in Snap has matured and given us a significant boost as we continue our work towards realizing the bold vision and goals.”
Saint Francis is a private Catholic school with a tuition cost of $17,000 a year. Hence, reducing tuition and making education affordable is a major goal for the school. According to Chiu, he thanked Snap CEO Evan Spiegel “for the opportunity” after the IPO investor presentation this week.
How a school became a venture capitalist is a pretty interesting story dating back to 2012 when Snapchat was a new app. Two students at the school, namely, Andrew and Natalie Eggers, were ardent users of the app. The app was a sensation not only with them but also with their friends. This caught the attention of their father Barry, who was a partner at local investment firm Lightspeed Venture Partners.
Barry Eggers decided to invest in the app, considering its popularity. He even met Snapchat co-founders Evan Spiegel and Bobby Murphy. After this, his company Lightspeed led Snapchat’s first investment round worth $500,000, according to the BBC. The investment had two contributors – Lightspeed and Saint Francis High School – which invested $485,000 and $15,000, respectively.
Snap’s IPO makes the school super rich
Snapchat’s parent company debuted on the NYSE on Thursday with a market value of $33 billion. This valuation was more than 7,750 times what it was when the high school invested, notes CNN.
Lightspeed invested about $8.1 million in the social company over the years, and now, its stake is worth about $2 billion based on Snap’s opening stock price. While the school’s exact earnings from the share sales are not known, it did raise $24 million by selling many of its shares at the opening price of $17, notes the BBC.
The school’s former president, Kevin Makley, told CNNTech, “We didn’t have real high expectations. We collectively decided that this was going to be a … small investment. So we’ll take a shot at it.”