Snap Inc IPO Raises Billions For Itself And Millions For This School

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.

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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.”