From Wikipedia the free encyclopedia
|Type of business||Public|
|Traded as||NYSE: CHGG|
Russell 2000 Component
|Headquarters||Santa Clara, California, U.S.|
|Key people||Dan Rosensweig,|
Chairman, president and CEO
|Products||Online textbook rental|
|Revenue||US$ 321.08 million (2018)|
|Operating income||US$ -6.22 million (2018)|
|Net income||US$ -14.89 million (2018)|
|Total assets||US$ 760.94 million (2018)|
|Total equity||US$ 410.63 million (2018)|
Zinch scholarship database
StudyBlue online flash cards
|Alexa rank||463 (July 2020[update])|
Chegg, Inc., is a publicly traded American education technology company based in Santa Clara, California. It provides digital and physical textbook rentals, online tutoring, and other student services.
The company was launched in 2005, and began trading publicly on the New York Stock Exchange in November 2013. As of March 2020 the company reported having 2.9 million subscribers to Chegg Services.
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. Chegg is a combination of the words chicken and egg, and references the founders’ catch-22 feeling of being unable to obtain a job without experience, while being unable to acquire experience without a job.
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". The company was incorporated in 2005 by Carlson, Rashid, and Aayush Phumbhra. At that time, it offered scholarship searches, internship matching, and college application advice. Some initial start-up funding was provided by Rashid.
In February 2006, Carlson left the company. Phumbhra and Rashid rebranded, launching Chegg, Inc. in December 2007, with Rashid as CEO. After ending services unrelated to renting and purchasing textbooks, the company adjusted its business model to reflect that of Netflix's then rental-based model, concentrating on renting textbooks to students, and Chegg expanded to a national market. It later added goods and student services through corporate acquisitions.
In 2008, revenues were about $10 million; in 2009, revenues for the month of January were reported as $10 million.
Chegg began trading shares publicly on the New York Stock Exchange in November 2013. Its IPO was reported to have raised $187.5 million, with an initial market capitalization of about $1.1 billion.
In April 2017, Chegg and Pearson Education began a textbook rental partnership; In the pilot program, the publisher Pearson made 50 editions of high-volume textbooks (both digital and print) available only to rent. Chegg served as the exclusive rental outlet.
In September 2018, Chegg announced a data breach had occurred in April 2018 that may have involved 40 million active and inactive registered users. The breach may have included data such as user names, Chegg passwords, email addresses, and shipping addresses. The company reported that social security numbers and bank account information were not affected by the breach.
As of March 2020 the company reported having 2.9 million subscribers to Chegg Services.
In 2010, Chegg made its first acquisition, purchasing CourseRank (later disabling the platform, in 2014). That year, Chegg also acquired Cramster, a provider of online homework help, and Notehall, an online marketplace for class notes.
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. Chegg acquired software company 3D3R in late 2011 to develop its digital textbook product, kickstart its mobile product group, and open an engineering office in Rehovot, Israel.. In June 2014 Chegg acquired online tutoring platform InstaEDU, for a reported $30 million, renaming the division Chegg Tutors, and in October 2014 it acquired Internships.com.
Chegg acquired Imagine Easy Solutions, a provider of online bibliography and research tools, for a reported $42 million, in 2016. In 2017, the company acquired Cogeon GmbH, a German math education provider, for $15 million cash; Cogeon's app, Math 42, uses artificial intelligence to assess individual students' weaknesses in math, and to inform targeted training.
As of July 29, 2019, Chegg's board of directors consists of:
- Dan Rosensweig, co-chair, president and CEO at Chegg
- Richard Sarnoff, co-chair at Chegg; chair at KKR & Co.
- Renee Budig, EVP and CFO at CBS Interactive
- Melanie Whelan, CEO at SoulCycle
- Marne Levine, VP at Facebook
- Ted Schlein, partner at Kleiner Perkins
- John York, co-chair at San Francisco 49ers
- Paul J. LaBlanc, president at Southern New Hampshire University
Criticism and controversies
Some services offered by Chegg have been repeatedly documented as being problematic. These services include academic file-sharing, which has been documented as being a form of violation of academic integrity at many schools.
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. The affiliation was met by some faculty criticism, alluding to Chegg helping students cheat; 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."
Controversy around the company, and related companies offering similar services, escalated in 2020, amidst the COVID-19 pandemic. For example, Georgia Tech alerted students in a physics class that certain students in the class had cheated on their online final exam by using answers posted on Chegg, certain students in a chemistry class at Boston University were found to have similarly cheated on an online exam, and solutions to a physics exam at Washington University in St. Louis were posted on Chegg during the exam period. Chegg is allegedly cooperating with the investigations. As a result, some schools have now begun providing explicit guidance to students regarding file-sharing.
Chegg Services and textbook rentals
By 2016, textbook rentals and student services were about even in company revenues; by 2018, Chegg Services reported 3.1 million subscribers, 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.
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.
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... calculated that his bill for books that semester would have been $334 with Chegg, far less than the $657 he paid...
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