Student website Chegg wants to raise up to $172.5M in IPO

Gigaom

Chegg, a student-focused website that offers textbook rentals and other tools, is hoping to raise between $142.5 million and $172.5 million in its IPO, according to an SEC filing Thursday.

The IPO would make 15 million shares available, at an expected price between $9.50 and $11.50 per share. That means it could raise as much as $172.5 million as part of this financing. The company plans to trade on the NYSE under the ticker CHGG, as announced this summer.

As my colleague Ki Mae Heussner wrote earlier this year, Chegg has expanded to offer a range of different services since it first launched as a textbook rental site in 2007: Aided by a number of acquisitions, including CourseRank, Zinch and Cramster, it now “offers students homework help, academic social networking and course reviews, among other services.” CEO is Dan Rosensweig, the former COO of Yahoo.

Chegg’s revenues for the nine-month period ending September 30, 2013 were $178.5 million, with losses of $57.2 million. “As a result of our investment philosophy, we do not expect to be profitable in the near term,” the company says.

For the year ending September 30, 2013, Chegg says more than 7 million students used its platform and 1.2 million used its mobile app. Among other stats shared in the SEC filing and for the year ending September 30:

  • Chegg has about 180,000 print textbooks for rent and 100,000 digital textbooks. It rented or sold 5.5 million print and digital textbooks.
  • The company says it reaches approximately 30 percent of U.S. college students and 40 percent of U.S. college-bound high school seniors.
  • The Chegg Study homework help service, which costs $14.95 per month after a free trial, has 418,000 subscribers.


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