Chegg

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Chegg, Inc.
Chegg logo.svg
Type of businessPublic
Traded asNYSECHGG
Russell 2000 Component
FoundedJuly 2005; 14 years ago (2005-07)
HeadquartersSanta Clara, California, U.S.
Founder(s)Aayush Phumbhra
Osman Rashid
Josh Carlson
Key peopleDan Rosensweig,
Chairman, president and CEO
Andrew Brown, CFO
IndustryEducation
Online retailing
ProductsOnline textbook rental
eTextbooks
Online learning
Online tutoring
Networking
RevenueIncrease US$ 321.08 million (2018)
Operating incomeIncrease US$ -6.22 million (2018)
Net incomeIncrease US$ -14.89 million (2018)
Total assetsIncrease US$ 760.94 million (2018)
Total equityIncrease US$ 410.63 million (2018)
Employees1,087 (2019)
SubsidiariesChegg Tutors
Zinch scholarship database
StudyBlue online flash cards
Notehall
Cramster
WebsiteChegg.com
[1]

Chegg, Inc., known as Chegg, is an American education technology company based in Santa Clara, California, with over three million subscribers. Chegg provides digital and physical textbook rentals, online tutoring, and other student services.[2]

History[edit]

In October 2000, Iowa State University students Josh Carlson, Mike Seager and Mark Fiddleke launched Chegg’s forerunner, Cheggpost, a Craigslist-style message board for Iowa State students.[3][4] Chegg is a portmanteau of the words chicken and egg, and references the founders’ catch-22 experience of being unable to obtain a job without experience, while being unable to acquire experience without a job.[5]

Carlson then teamed with Iowa State MBA Osman Rashid, an avid user of the site who recognized its potential to disrupt the textbook market, which had “drastically outpaced the rate of inflation.”[6] The company was incorporated in 2005 by Carlson, Phumbra and Osman Rashid.[4] At that time, it offered scholarship searches, internship matching, and college application advice.[2] Some initial start-up funding was provided by Rashid.[7]

In February 2006, Carlson left the company.[7] Phumbra and Rashid rebranded, in December 2007, launching Chegg Inc., with Rashid becoming CEO. They disabled services unrelated to renting and purchasing textbooks[4] and expanded Chegg to a national market. Chegg later added goods and student services through corporate acquisitions.[8]

In 2007, the company adjusted its business model to reflect that of Netflix's then rental-based model, concentrating on renting textbooks to students.[5][9]

In 2008, revenues were about $10 million; in 2009, revenues for the month of January were reported as $10 million.[10]

Following a brief tenure by former Ask.com and Match.com CEO Jim Safka, in 2009,[11] former Guitar Hero CEO Dan Rosensweig was appointed CEO, in 2010.[12]

In 2014, Chegg announced a partnership with Ingram Content Group, which expanded, in 2015, to give Ingram full management of Chegg’s distribution.[13][14]

Chegg CEO Rosensweig was, in March 2016, among over 80 CEOs to sign a letter denouncing a North Carolina law that invalidates legal protections against the discrimination of LGBT people.[15]

In April 2017, Chegg and Pearson Education began a textbook rental partnership.[16]

In September 2018, Chegg announced a data breach had occurred, in April 2018, that had impacted 40 million user accounts. The breach included the loss of user names, hashed passwords, addresses and e-mails. The company reported that Social Security numbers and bank account information were not affected by the breach.[17]

In 2018, Chegg was named to Fortune’s annual “25 Best Small and Medium Workplaces for Women” list.[18]

Chegg and College Pulse launched an interactive college student political polling tool for the 2020 United States presidential election, as the Chegg/College Pulse Student Election Tracker, in July 2019.[19]

In June 2019, Chegg launched a program that provides its employees with $3,000 to $5,000 annually in company shares for individual student debt relief, citing corporations as “the beneficiaries of those people who have gotten an education”.[20]

On July 29, 2019, Chegg Services reported 2.23 million subscribers.[21][22]

Acquisitions[edit]

In 2010, Chegg made its first acquisition, purchasing CourseRank (later disabling the platform, in 2014).[23][24] That year, Chegg also acquired Cramster, a provider of online homework help,[25] and Notehall, an online marketplace for class notes.[26]

In 2011, Chegg acquired Zinch, a scholarship search and networking service for high school students and college recruiters, and continues to offer the service, under the Chegg brand name.[27] Chegg acquired online tutoring platform InstaEDU, in 2014, for a reported $30 million,[28] renaming the division Chegg Tutors,[24],[29] as well as Internships.com.[30]

Chegg acquire Imagine Easy Solutions, a provider of online bibliography and research tools, for a reported $42 million, in 2016.[31] In 2017, the company acquired Cogeon GmbH, a German math education provider, for $15 million cash.[32] Cogeon's App, Math 42, uses artificial intelligence to assess individual students' weaknesses in math, and to inform targeted training.[33]

In April 2017, the publisher Pearson unveiled a textbook rental partnership with Chegg. In the pilot program, Pearson made 50 editions of high-volume textbooks (both digital and print) available only to rent. Chegg served as the exclusive rental outlet.[34]

In 2018, Chegg acquired WriteLab from Matthew Ramirez for $15 million, which uses AI to analyze text and suggest improvements,[35][36] and online flash card tool StudyBlue.[37]

During late 2019, Chegg acquired online coding school Thinkful,[38] for $80 million cash.[39]

Chegg Services and textbook rentals[edit]

By 2016, textbook rentals and student services were about even in company revenues;[40] by 2018, Chegg Services reported 3.1 million subscribers,[41] with services accounting for 79% of revenue. Students may search for both scholarships and internships on the website, and typically pay to access Chegg Services, such as Study, Advanced Writing, Tutors, and Math Solver, on a monthly basis.[40]

Music 101[edit]

Chegg sponsors music instruction contests for colleges in a program named Music 101. These conclude with live classroom instruction by noted music artists, and a $10,000 grant from its David B. Goldberg Music Scholarship fund for the winning school music department. In 2019, the company launched its ninth annual Chegg Music 101 campaign featuring YUNGBLUD. Previous events have featured U2, Imagine Dragons, Taylor Swift, Ed Sheeran, Shawn Mendes, Steve Aoki, and Liam Payne.[42][43]

Financial[edit]

In December 2008, $25 million was raised from Silicon Valley venture capitalists by Chegg.[44] By April 2016, the company had progressed through 12 funding rounds, garnering $289.6 million in venture capital funding, according to Crunchbase.[45] Investors include Foundation Capital, Insight Venture Partners, Kleiner, Perkins, Caufield & Byers, Pinnacle Ventures, and TriplePoint Capital.[46][7]

Chegg began trading shares publicly on the New York Stock Exchange in November 2013.[47] Its IPO was reported to have raised $187.5 million, with an initial market capitalization of about $1.1 billion.[48]

Leadership[edit]

Chegg headquarters in Santa Clara

Board of directors[edit]

As of July 29, 2019:

Management[edit]

As of June 5, 2019:

  • Andrew Brown, CFO
  • Nathan Schultz, president of Learning Services
  • Michael Osier, CIO and chief outcomes Officer
  • Esther Lem, CMO
  • Jenny Brandemueh, chief people officer[51]

Criticism and controversies[edit]

In February 2019, Chegg formed a partnership with Purdue University's Online Writing Lab (OWL), to make online educational writing tools more accessible to its students.[52] The affiliation was met by some faculty criticism, alluding to Chegg helping students cheat[53]; OWL director Harry Denny reported that he did not expect Purdue’s reputation to suffer as a result, citing that “My experience has been that the company is committed to partnering with faculty and administration to address their concerns."

A report published by Citron Research in July 2019 claims that "Chegg has created forums to attempt to circumvent Turnitin, proving that Chegg is trying to help users continue institutionalized cheating".[54]

See also[edit]

References[edit]

  1. ^ "2018 Annual Report" (PDF). Chegg. Retrieved October 27, 2019.
  2. ^ a b Sharma, Asit (2018-03-22). "Is It Time to Take a More Serious Look at Chegg, Inc.? -". The Motley Fool. Retrieved 2019-05-02.
  3. ^ "Auction site connects buyers and sellers" by Nate Engelberth; Iowa State Daily; October 19, 2000.
  4. ^ a b c Pederson, Jay P., editor. (2013). International directory of company histories. St. James Press. p. 115. ISBN 9781414482224. OCLC 833188977.CS1 maint: multiple names: authors list (link) CS1 maint: extra text: authors list (link)
  5. ^ a b Miguel Helft (July 4, 2009). "We Rent Movies, So Why Not Textbooks?". The New York Times. Retrieved 2010-01-26. ... calculated that his bill for books that semester would have been $334 with Chegg, far less than the $657 he paid...
  6. ^ "Fast-Growing Chegg Aims for High Marks with Students" by Lisa Girard; Entrepreneur; January 18, 2012.
  7. ^ a b c "How Chegg Has Turned Education Upside Down" by Nat Berman; Money Inc; November 7, 2016.
  8. ^ "Apple Creates New Wrinkle In Start-Up's Plan To Disrupt Textbook Industry" by Helen Coster; Forbes; January 25, 2012
  9. ^ Julie Schmit (2009-01-12). "Chegg CEO Rashid applies Netflix concept to textbooks". USA Today. Retrieved 2010-01-26.
  10. ^ Miguel Helft (July 4, 2009). "We Rent Movies, So Why Not Textbooks?". The New York Times. Retrieved 2010-01-26.
  11. ^ "Rosensweig Lands at Textbook Renter Chegg.com" by MIGUEL HELFT; The New York Times; FEBRUARY 2, 2010.
  12. ^ McNicholas, Kym. "Dan Rosensweig: His Journey From Yahoo To Guitar Hero Then Chegg". Forbes. Retrieved 2019-06-12.
  13. ^ Merced, Michael J. de la (2014-08-04). "Chegg Finds Partner to Handle Its Textbooks". The New York Times. ISSN 0362-4331. Retrieved 2019-02-27.
  14. ^ "Chegg Strikes Distribution Partnership With Ingram Books, Announces 15% Boost In Earnings From Digital Services".
  15. ^ "Chegg CEO: Why we’re protesting NC’s ‘anti-LGBT’ law" by Akane Otani; CNBC; March 31 2016
  16. ^ "Pearson to partner with Chegg on textbook rentals | The Bookseller". www.thebookseller.com. Retrieved 2017-09-26.
  17. ^ "CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934". Security and Exchange Commission. Retrieved 29 September 2018.
  18. ^ "25 Best Small and Medium Workplaces for Women"; Fortune; 2015.
  19. ^ "Chegg And College Pulse Launch Interactive College Student Political Polling Tool For The 2020 Presidential Election"; Bloomberg; July 10, 2019.
  20. ^ "Education company Chegg is helping pay down its employees’ student loan debt" by Michelle Fox; CNBC; June 6 2019.
  21. ^ "Chegg Reports Q2 2019 Financial Results and Raises Full Year 2019 Guidance"; Yahoo! Finance; July 29, 2019.
  22. ^ "Top 5 E-Commerce ETFs For Investing In Online Retail" by Prableen Bajpai; Nasdaq; OCT 25, 2019.
  23. ^ "TC Teardown: Chegg Is A Money Machine". June 5, 2018.
  24. ^ a b Cao, Vincent (2014-11-10). "CourseRank to be taken down at the end of the month". The Stanford Daily. Retrieved 2019-06-12.
  25. ^ "Exclusive: Chegg Buys Cramster".
  26. ^ "SEC filing cracks the egg on Chegg's Notehall purchase".
  27. ^ "Chegg Buys Zinch in Another Move Toward a "Social Education Platform"".
  28. ^ Kolodny, Lora (2014-06-04). "Chegg Acquires Tutoring-On-Demand Site InstaEDU in $30M Cash Deal". Wall Street Journal. ISSN 0099-9660. Retrieved 2019-02-27.
  29. ^ "Chegg buys InstaEDU in transition away from book rentals", by Erin Griffith; Fortune; March 6, 2013.
  30. ^ "Chegg"; Crunchbase
  31. ^ Lardinois, Frederic. "Chegg acquires Imagine Easy Solutions, the company behind EasyBib, BibMe and Citation Machine". TechCrunch. Retrieved 2017-05-06.
  32. ^ Sharma, Asit (2018-03-22). "Is It Time to Take a More Serious Look at Chegg, Inc.? -". The Motley Fool. Retrieved 2019-05-31.
  33. ^ "MATH 42". Crunchbase. Retrieved 2019-05-31.
  34. ^ "Pearson to partner with Chegg on textbook rentals | The Bookseller". www.thebookseller.com. Retrieved 2017-09-26.
  35. ^ Sternlicht, Alexandra. "His Company WriteLab Was Acquired by Chegg Before He Turned 30". Forbes. Retrieved 2019-05-03.
  36. ^ "Chegg Cuts $15 Million Check to Buy AI-Feedback Tool, WriteLab - EdSurge News". EdSurge. 2018-05-16. Retrieved 2019-05-03.
  37. ^ "Chegg Enhances Content And Flash Card Tools Offering With Acquisition Of StudyBlue, To Increase Value for Students And Expand Addressable Market". investor.chegg.com. Retrieved 2019-10-02.
  38. ^ "Chegg to Acquire Coding Boot Camp" by Lindsay McKenzie; Inside Higher Ed; September 5, 2019.
  39. ^ "Chegg To Acquire Online Skills-Based Learning Platform Thinkful To Help Students Accelerate Their Path From Learning To Earning"; Reuters; September 4, 2019.
  40. ^ a b "CHEGG: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K)"; Marketscreener; February 25, 2019.
  41. ^ "Chegg (CHGG) Tops Q4 Earnings Estimates, Raises '19 View"; Yahoo! Finance; February 12, 2019.
  42. ^ "Chegg Looking For A Come-Up In School Contest"; InsideRadio; September 1, 2015.
  43. ^ "Vote to bring Chegg Music 101 with YUNGBLUD to your school"; WN.com; September 16, 2019.
  44. ^ Miguel Helft (July 4, 2009). "We Rent Movies, So Why Not Textbooks?". The New York Times. Retrieved 2010-01-26.
  45. ^ "Chegg"; Crunchbase
  46. ^ "Chegg adds another $75M to textbook rental cash pile | VentureBeat". venturebeat.com. Retrieved 2017-11-01.
  47. ^ De La Merced, Michael (12 November 2013). "Chegg Prices Its I.P.O. at $12.50 a Share".
  48. ^ "Chegg stock stumbles after IPO tops targets".
  49. ^ "Chegg appoints Melanie Whelan to Board of Directors". www.wrcbtv.com. Retrieved 2019-06-12.
  50. ^ "Chegg appoints Dr. Paul J. LeBlanc to Board of Directors". Chegg, Inc. Retrieved July 29, 2019.
  51. ^ "Chegg, Inc. - Sec Filings". investor.chegg.com. Retrieved 2019-05-03.
  52. ^ Pratt, Kati (February 6, 2019). "The Purdue University Online Writing Lab and Chegg Partner to Make World-Class Writing Education Tools More Accessible". Purdue.edu. Purdue University. Retrieved November 19, 2019.
  53. ^ Mckenzie, Lindsay (March 12, 2019). "The Wrong Partnership?". InsideHigherEd.com. Retrieved November 19, 2019.
  54. ^ "Institutionalized Cheating is No Longer OK". citronresearch.com.

External links[edit]