US media company NBCUniversal acquired a $500m (€470.8m) stake in the initial public offering of Snap Inc, the parent company of social media platform Snapchat, according to NBCU chief executive Steve Burke.
Snapchat has built a steadily growing presence in the sports media market, of which agreements with NBCU have played a part, and had targeted a valuation of between $19.5bn and $22.3bn before last week’s IPO. However, Snap priced 200 million shares on Wednesday night at $17, above its stated range of $14 to $16 a share, placing its market valuation at roughly $24bn.
Burke announced to employees on Friday that the company acquired about 15 per cent of the shares available in the IPO at $17 per share. Snap Inc shares opened trading on the New York Stock Exchange at $26.39 today (Monday).
“We will continue to be aggressive as digital content consumption increases,” Burke said in a letter to employees reported by the USA Today newspaper. “Investing in Snap is a key step in that direction. … It is rare to have the opportunity to invest at this stage in a company as visionary and dynamic as Snap, and it is a compliment that they chose NBCU as a partner.”
NBCU was the first advertiser on Snapchat and the first major US network owner to commit to developing shows for the platform. In August, NBCU agreed a multi-year content and advertising deal with Snapchat that allowed the company to produce original shows for the social media platform.
The deal covers sports, as well as news and entertainment. As part of the agreement, NBCU will develop and sell advertising packages incorporating Snapchat’s expanded set of advertising products into its sponsorship, mobile and video offerings.
Last year, the NBC Olympics division of NBCU agreed a content partnership with Snapchat to enable video content to be shared from the 2016 summer Olympic Games via the platform’s ‘Live Stories’ feature.
The Los Angeles Times newspaper noted that NBCU also owns portions of media start-ups BuzzFeed and Vox – two other key business partners of Snap – through $600m worth of investments.