Many of you might have not heard about Chegg.com before. Chegg, located in Santa Clara, California is a startup that enables its users to rent textbooks for the semester instead of having to buy them. The idea is great. To show I am not alone in thinking what a unique concept this is, Kleiner Perkins Caulfield & Byers as well as Foundation Capital just infused $25 million in a third round of funding. Prior to this funding, Chegg raised $2.2 million from investors Gabriel Venture Partners and Primera Capital who also appear to have contributed to this new round as well.
Considering the current economic conditions around the world, this is a rather bold and optimistic amount of money to invest into a tech compay. Chegg hasn’t been too open about its financials, but they have noted that they have been used by students in over 4,000 Universities and Colleges, and it is estimated they have saved these students over $16 million dollars. Back when I went to College, I recall having to work evenings just to afford the books that my professors required. It seems like they go into the book stores and find which books are the most expensive and then decide to put those on the syllabus. With Chegg you get to rent the book, mark the books up and then return them when you are done at the end of the semester. Imagine not having to worry about selling them back to the bookstore for 1/4 of what you paid. Usually the books a student orders on the website is sent to them within eight business days. The books come in a pre-paid box that are used to return the books. Whether the economy is good or bad, a student will always be happy saving a few bucks anyway they can.
For those of us who believe in a green economy, Chegg will plant a tree for each and every book that is rented.
Although Chegg does not face any real competition to date, it seems likely that many will copy this concept. Hopefully Chegg.com has a big enough lead to keep them number one if other should emerge.