Textbook rental company Chegg filed for an initial public offering on August 14, and it’s hoping to raise $150 million.
Chegg started as a Craigslist-style site that sold and rented cheap textbooks, but over the last decade it has become an online hub to help college students get tutoring, choose their courses, and take notes. Its CEO, Dan Rosensweig, has said he envisions Chegg as the “student graph” – an educational equivalent of Facebook’s social graph of user information.
Now, Chegg is taking another page out of the social network’s book: it’s going public.
Chegg filed for an initial public offering on Aug. 14, and it’s hoping to raise $150 million. The company is valued at $800 million and, according to its S-1 filing, generated a net revenue of more than $213 million in 2012. It has already raised nearly $200 million from various investors.
The company has come a long way since it was created by a handful of Iowa State University undergrads in 2001.
Originally called cheggpost.com, it slowly grew until its textbook-rental service helped it become a go-to venue for students looking to save money on class materials.
In 2010, Rosensweig, who previously served as CEO of Activision’s Guitar Hero division as well as the COO of Yahoo, became Chegg’s CEO. Rosensweig’s Chegg has been a more aggressive company, expanding far past its textbook origins, once acquiring six higher education companies in just over a year.
See Page 2 for details on what high profile members have been added to Chegg’s board of directors.
Even with its growth in other areas of the education sector, Chegg remains primarily a textbook seller, which means its business is still often very seasonal and that operating results can be hard to predict.
“The increased volume of orders that we have to process during these limited periods of time means that any shortfalls or disruptions in our business during these peak periods will have a disproportionately large impact on our annual operating results and the potential future growth of our business,” the company warned potential investors in its filing.
Some changes to the company are already taking place ahead of the IPO. Chegg founder Aayush Phumbhra is stepping down from the company’s board of directors. Four new high-profile members will be added to the board, which already included Rosensweig, Ted Schlein, and Barry McCarthy.
The new members are Jeffrey Housenbold, President and CEO of Shutterfly; Marne Levine, Vice President of Global Public Policy, Facebook; Richard Sarnoff, Senior Advisor of Kohlberg Kravis Roberts & Co; and Jed York, CEO of the San Francisco 49ers.
“Each of these new members has a successful track record of managing influential organizations, with significant accomplishments in media, commerce, public policy and beyond,” Rosensweig said in an announcement. “All have been engaged with innovative companies who put consumers first. Their combined expertise will be invaluable as we continue to expand our services to help students. We are thrilled to have them join our board.”