Successful Snap IPO Nets Billons In Profits To Australian Investor

The recent highly-successful Initial Public Offering (IPO) of Snap, the parent company of the path breaking messaging app Snapchat has not only made its founders richer by billions of dollars but also relatively-unknown early investors like Australian venture capitalist Jeremy Liew.

Liew who is a partner at Lightspeed Venture Partners was the first to make an investment into the company which was then known as Snapchat.

The investment has now yielded billions in profits for the firm after Snap completed a recent initial public offering (IPO).

Commenting on the news, Liew played down the success saying it was just another day at office and that he hoped that it wouldn’t be his last big win though acknowledging that it was a career-defining deal.

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A graduate of the Australian National University, Liew is from Perth but has been living in U.S. for the past 20 years. He has invested in several large social media ventures in his career including Flixster, Playdom and Kongregate. But Snap has been the most valuable investment of them all.

The initial investment by Liew was $485,000 (A$641,000) from Lightspeed's funds in 2012. He acted on a colleague’s tip that his children were hooked onto the app. After making contact with Snap founder Evan Spiegel through Facebook, Liew organized the deal in two weeks’ time. As of at the time of the IPO, Lightspeed’s investments into the company totaled $8.5 million.

Snap opened on the New York Stock Exchange last week at $24, which was a 41 percent increase above its issue price of $17. The company’s listing price put its market capitalization at $28.4 billion. Lightspeed sold a partial stake for $74 million during the IPO while still retaining stake worth $2 billion at last trading prices.

Earlier this month, media reports had hinted at a falling out between the founders and Liew. The report claimed that Lightspeed's early investment had vested it with veto power over funding, which had jeopardized further investments from other venture capital firms into the company. Liew minimized the disagreement with the founders.

In a statement Liew said,

I think it was a bit overblown. In any five-year relationship there are going to be some points of friction, we had some disagreements and we resolved them. He [Spiegel] is an extraordinary founder, product visionary and leader

Snapchat is an app which allows users send and view ephemeral messages called snaps. The company has since expanded, launching a hardware product Snapchat Specs and a payment feature called Snapcash.

Chad Simmons

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