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California high school makes millions on Snap IPO

CNBC logo CNBC 3/03/2017 Karen Gilchrist
© Provided by CNBC

A high school in Mountain View, California, has made millions from Snap's initial public offering (IPO) less than four years after investing $15,000 in the Silicon Valley technology company.

Saint Francis High School was one of the first investors in the company behind the ephemeral messaging app Snapchat, having invested a small proportion of its endowment fund in Snap Inc's seed round of financing in 2012.

Snap made its trading debut Thursday at the New York Stock Exchange. It had priced its IPO of 200 million shares at $17 each but shortly after the opening bell stock began trading significantly higher, eventually closing at $24.48 per share – up 44 percent on expectations.

Saint Francis, a private Catholic school with annual tuition fees over $17,000, sold 1.4 million shares – two thirds of its overall stake – for $17 per share at Thursday's IPO.

The school has not confirmed its overall return but it is estimated to have made nearly $24 million, according to officials cited by NBC.

© Provided by CNBC Simon Chiu, president of Saint Francis, announced the good news Thursday in a letter to parents.

"The school's investment in Snap – which this morning announced the completion of its IPO – has matured and given us a significant boost as we continue our work towards realizing the bold vision and goals set out in our community-inspired strategic plan: leading with Hope & Zeal," noted Chiu in the letter.

"This incredible boon will not, by itself, completely fund the goals of the strategic plan, but it will lay the necessary foundation and give us a remarkable head start," he added.

The school first became involved in the technology firm in 2012 when Barry Eggers, a parent of two Saint Francis pupils and founding partner of venture capital firm Lightspeed Venture Partners, became intrigued by his children's use of the app.

Eggers met with Snap co-founders Evan Spiegal and Bobby Murphy, who at the time were working out of Stamford dorm room, and, having been suitably impressed, prompted Lightspeed to lead a $500,000 investment round – the company's first.

Lightspeed invested $485,000 and Eggers invited Saint Francis' to put forward the remaining $15,000 from its investment fund that had been created in 1990 by parents and former Saint Francis president Kevin Makley to support long term initiatives.

In his note to parents, Chui thanked Eggers' for his "remarkable generosity".

A blog post by Barry Eggers posted Thursday on Lightspeed Venture Partners' website said: "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."

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