Catholic high school earns millions from Snapchat IPO

The app's been a massive hit on Wall St...

Catholic high school earns millions from Snapchat IPO

Richard Drew/AP/Press Association Images

Parents of pupils in St Francis high school in California received an unusual letter yesterday - revealing that the school stands to earn millions of dollars from Snapchat's IPO.

It established an investment fund in the 1990s which was invited to take a stake in the company during an early investment round.

Barry Eggers' two sons attended the school - after they became transfixed by the app in 2012 he started to investigate - and to consider investing in the fledgeling company through his firm, Lightspeed Venture Partners.

He met co-founders Evan Spiegel and Bobby Murphy - who were operating the company out of a Standford dorm - and he decided to back the start-up.

He invested $485,000 in the company and invited the school to also participate - it invested a further $15,000 bringing the total cash injection to half a million.

"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," Simon Chiu, the school's president wrote.

The BBC estimates that the total amount earned is likely to be close to $24m.

It says that it hopes to use this money to make "Catholic education more affordable." The private school's annual fees are close to $17,000 per year.

Barry Eggers commented that it has been "amazing" to see the apps growth, adding that it has, "already changed how we communicate today."

Wall St Darling

Snap Inc, the parent company of video messaging app, Snapchat, listed on the New York Stock Exchange yesterday, having issued 200m new shares at a price of $17per share.

Demand for the shares was nearly 12 times oversubscribed – and this from a company that not only has never made a profit (and lost $500m last year). New investors will be given very little say in how the company is run.

But those same investors smell the possibility of another Facebook rather than a Twitter; there hasn’t been a big new technology flotation for more than three years and markets are in an optimistic mood.
Their hope is that significant advertising revenues can be raised from a platform of 160m daily users - who access Snapchat an average of 18 times a day.

Snap's share price rose by almost 50% in value at one stage yesterday and closed 44% higher at $24.48.

That places a current valuation of Snap at $28bn, with Evan Spiegel and co-founder Bobby Murphy’s holdings worth about $5bn each.