School makes millions from Snapchat IPO
- 3 March 2017
- From the section Technology
A huge tech initial public offering raises billions. More money for super-rich investors and bankers, right?
Well that's not the whole story. Not this time.
If you're a parent, a letter home from school is common.
But today, Simon Chiu, the president of Saint Francis High School in Mountain View, California, wrote to parents to share some "monumental news".
In 2012, he began, the school invested $15,000 in a cool new app that was being used incessantly by Andrew and Natalie Eggers, two siblings who attended the school.
Their father Barry was a partner at Lightspeed Venture Partners, a local investment firm. After seeing how excited his children were to be using the app, and learning that their friends were as obsessed as they were, he decided to get involved. It was, of course, Snapchat.
He met with co-founders Evan Spiegel and Bobby Murphy, who today are multi-millionnaires thanks to their company's incredible stock market debut, but back then were working out of a dorm room at Stanford.
Mr Eggers was suitably impressed, and so Lightspeed led a $500,000 investment round - Snapchat's first.
The firm invested $485,000, but Mr Eggers also convinced Saint Francis High School to throw in $15,000 from a school development fund set up in the 1990s.
In what must go down as one of the understatements of the year, Mr Chiu's letter on Thursday continued: "The school's investment in Snap has matured and given us a significant boost as we continue our work towards realising the bold vision and goals."
One of those goals is to make education at Saint Francis - a private, Catholic school where tuition costs $17,000 a year - more affordable to more people in the surrounding community.
So how much did the school earn? It's hard to say exactly right now. It sold many of its shares on Thursday at the $17 opening price. That raised a cool $24m.
It kept hold of a third - and at the close of play on Thursday, Snap's stock was up by 44%. A great little earner - with perhaps a lot more still to come.
In a blog post about the deal, Mr Eggers wrote: "While I've enjoyed Snap's journey with my partners as an early investor, I have the unexpected bonus of sharing the experience with my children.
"It's been amazing for us to watch how far Evan and Bobby and Snap have come since that kitchen table conversation between my daughter and me… and how much they've already changed how we communicate today."