Snap IPO launches VC firm Lightspeed Into Silicon Valley elite

Venture capital is a notoriously clubby industry, with an elite bunch of firms generating the majority of financial returns. Sequoia Capital, founded in 1972, is almost unanimously placed near the top of the heap for their ability to spot big winners early, along with Benchmark, a relative upstart at 22 years old.

Silicon Valley scorekeepers are now adding a newer firm to the list: Lightspeed Venture Partners. It's been on a stellar run in recent months, with a series of blockbuster sales and initial public offerings at a time when U.S. startup deal-making has slumped to a three-year low. Lightspeed's investments in Snap alone, totaling $8.1 million, have amassed more than $2 billion in gains.

The performance of Lightspeed funds over the last year is unprecedented in recent memory and easily elevates it to top-five status today, said Anand Sanwal, head of market researcher CB Insights. 'I can't think of a firm that's had so many big wins in such a short time frame as what Lightspeed has done,” he said. 'It's kind of remarkable.”

Lightspeed was the largest shareholder in the September initial public offering of Nutanix Inc., the data center software provider whose share price has nearly doubled. It was also the biggest, along with another firm, in AppDynamics, which unexpectedly struck a deal to be acquired by Cisco Systems for $3.7 billion in January on the eve of a planned IPO. And it's the largest in MuleSoft Inc., another corporate cloud software company, which filed Feb. 17 for an IPO.

Finally, a long-shot bet on a photo-sharing app called Snapchat paid off Thursday as parent company Snap Inc. saw its share price pop, gaining 44 percent after the first day of trading. It's up another 15 percent just before noon in New York. Lightspeed was the second-largest holder when Snap went public, behind Benchmark. Lightspeed sold about $78 million in the IPO and retains a stake worth $2 billion.