NBC Invests $500 Million in Snapchat as Part of IPO to Build Digital Media Business
"This is a significant milestone in our growing partnership with Snap," NBCUniversal CEO Steve Burke told employees in an email.
NBCUniversal, has invested $500 million in Snapchat parent Snap Inc. during its IPO on Thursday, and as part of a longterm partnership.
"This is a significant milestone in our growing partnership with Snap," NBCUniversal CEO Steve Burke told employees in an email on Friday morning. He added, "we look forward to participating in Snap's success as an investor and continuing to work closely with them for years to come."
Snap, led by CEO Evan Spiegel, on Wednesday sold 200 million shares at $17 a piece in an IPO that netted $3.4 billion. The following day, shares opened on the New York Stock Exchange at $24, immediately giving the messaging startup a $33 billion valuation. The stock closed its first day of trading at $24.48, up 44 percent from its $17 initial price.
NBCU, which is owned by Comcast, has been a longtime partner of Snapchat's. The company worked with BuzzFeed to develop content for Snapchat's Discovery channel during the Olympics. And last August it ran a companion series to The Voice on the app.
In his memo, Burke told employees that NBCU saw more than 2 billion views to its Rio Olympics Snapchat coverage and is already planning to work with BuzzFeed and Snapchat again during the 2018 Winter Olympics in South Korea. "Our partnership with Snap builds on our strategy to drive digital growth for our business, both organically and through investments and acquisitions," Burke continued.
Over the last two years, NBCU has invested significantly to build up its digital savvy. It has put a total of $400 million into BuzzFeed and also invested $200 million in digital publisher Vox. Meanwhile, its acquisition of DreamWorks Animation last year gave it a majority ownership stake in AwesomenessTV, which produces tween-skewing content for YouTube and other digital platforms.
"I am proud of the strides we have made in the digital space recently," Burke wrote. "With the Snap investment, we have invested over $1.5 billion in promising digital businesses in the last 18 months. Importantly, we have become a better, more digitally-focused company as a result."
He concluded: "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."