Friday, November 20, 2009

The next Amazon? or next Bust? Chegg.com Secures $112 Million


Chegg.com's transformative concept of money-saving, online rental access to textbooks has made it one of the Internet's fastest growing companies and the number one online textbook rental company. Launched nationally in 2007, to-date, Chegg.com has saved students more than $65 million off the cost of textbooks at more than 6,400 colleges. With a growing inventory of more than 2.4 million titles, Chegg.com puts textbooks into the hands of students when they need them arriving in the brand's iconic orange box. For every book rented, Chegg.com plants a tree through American Forests' Global ReLeaf Program. To date, Chegg.com has planted more than 3,000 acres of forests.

The No. 1 online textbook rental company, announced it has successfully closed $57 million Series D equity funding, led by Insight Venture Partners. In addition, Insight Venture Partners also led a syndicate that has provided a $25 million credit facility, adding to the $30 million in debt facility recently secured from Pinnacle Ventures and TriplePoint Capital. With this capital, Chegg.com plans to service the company's extraordinary growth, enhance its commitment to best-in-class customer service and further build partnerships with publishers, wholesalers and colleges. As part of the funding event, Deven Parekh from Insight Venture Partners joins Chegg.com's Board of Directors.

"We are thrilled with the continued excitement from leading investors who understand the tremendous value we provide to students around the country," Chegg.com Chief Executive Officer and Co-Founder Osman Rashid said. "This new funding is a significant step up from Series C and a testament to the growing market opportunity for Chegg.com's textbook rental offering. With college tuitions continuing to climb and higher unemployment rates, parents and students are looking for any and all ways to cut costs."

"Chegg.com exemplifies the type of company we look to invest in; a company that provides meaningful customer value, has a strong and growing customer base and, most importantly, an idea and an innovative spirit that drives business objectives," said Deven Parekh, managing director of Insight Venture Partners, which has also invested in Twitter and SolarWinds among others. "We are big believers in the market potential for online textbook rentals and are excited about the high-growth trajectory of Chegg.com. Insight's infusion of new financing will enable Chegg.com to execute on its aggressive growth plans."

"The aggressive growth Chegg.com has experienced is not only because we provide students significant savings on their textbooks -- on average $500 per year -- but our dedication to unparalleled customer service." Chegg.com Senior Vice President of Operations and Co-Founder Aayush Phumbhra said. "Some of the additional funding will be used to further enhance our commitment to best-in-class customer service and build more partnerships with publishers, wholesalers and colleges."

The founders:

Osman Rashid
Chairman and Co-Founder
As an entrepreneur extraordinaire, a bright idea is never far away for Osman Rashid, CEO and co-founder of Chegg.com.
Osman has founded four companies (so far). eBot.com, which launched while he was still in college, is an e-mail management company later sold to a major software provider. He also started Gravitywell, an ASP based customer service solution, and Venturian, a subsidiary of ATIO Corporation, where Osman served as VP of Business Development and Marketing. Between start-ups, Osman was Director of Business Development at Chordiant Software, Inc.
Since its launch in 2003, Chegg.com has grown over 25 times its original size. Osman was inspired to launch Chegg.com because he wanted college students to have convenient access to textbooks at a reasonable cost. Chegg.com’s purpose is simple: Students don’t need to purchase textbooks; they need to be allowed to rent them.
Osman holds a Bachelor’s in Electrical Engineering from the University of Minnesota. He resides in Fremont CA with his wife and two daughters. One day, Osman hopes to climb to the summit of Mount Kilimanjaro. He’ll get there.

Aayush Phumbhra
Vice President and Co-Founder
A business visionary, Aayush Phumbhra is now leading Chegg.com through the rental textbook market as a co-founder. Inspired by his personal experience and frustration with his own university’s bookstore, Aayush believes in the vision of Chegg.com: help college students save money by providing them with the option to rent rather than simply buy the textbooks.
Prior to the founding of Chegg.com, Aayush was an analyst at Wells Fargo Home Mortgage and a management and technology consultant at BearingPoint. Before he moved to the United States in 2001, Aayush launched two companies in his native India, one of which focused on Web and graphic design.
As a VP, Aayush drives Chegg.com’s growth, spreading the service to more and more college campuses and leading in the development of strategic business relationships. Aayush holds an MBA in Marketing and Accounting from Iowa State University.

7 comments:

Anonymous said...

what a concept especially in this economy. how about selling used digital content? lol

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