Tenaya Capital leads $17M Series B for Inkling

The digital textbook platform gets support from new and returning investors, including Sequoia

And the textbook wars rage on… Digital textbook platform Inkling—easily the most formidable digital textbook platform on the market—on Wednesday announced the close of a $17 million Series B round of funding led by Tenaya Capital, with help from Jafco Ventures, Pearson Education, and Sequoia Capital. 

First, I want to preface this story by relating the call I just had with Inkling CEO Matt MacInnis.  He was running a couple minutes late, and I made a joke about him wasting my time—and then remembered shortly thereafter that he’s traveling and managed to squeeze me into a half-hour opening he had—so now I feel like a complete tool.  So now that I’ve confessed what a lame reporter I am, we can get on with the funding.

Inkling’s funding comes amid a recent hailstorm of textbook rental service announcements.  On Monday, Chegg competitor CampusBookRentals.com announced its $20 million round of funding, and in July, Amazon made a splash in the textbook rental scene with a new twist: digital textbook rentals.  When I asked MacInnis if he sees Inkling ever offering a digital textbook rental service, he shrugged it off.

“It’s not something we’re opposed to, but I just don’t see us pursuing it,” he said.  “We’ll listen to the market, but our perspective is that renting makes sense for physical goods, not digital goods.  We went the route of offering content by the chapter instead.  If a student only needs 15 chapters for a semester, then it’s cheaper to just buy the chapters than rent the whole book.”

In addition to cost, Inkling has another advantage over other digital textbook services (like Kno): it’s interactive.  Students who buy books through the Inkling platform can go beyond basic highlighting and note-taking to enhance their studies through self-assessments and quizzes, as well as remote note-sharing with other students and professors right from their iPads. 

Amazon and Kno don’t offer that kind of interactivity.  Amazon simply can’t offer that kind of interactivity on a Kindle screen (it’ll be a different story when Amazon releases its tablet, but that’s for another day), and Kno has taken to offering e-books in PDF files via its iPad app after scrapping its plans to release a $900 dedicated e-reader. 

Inkling is not yet disclosing how many users it now serves, but MacInnis said that Inkling now has 10-times the amount of content it did a year ago, and by next year, it will have another 10-times more.  And rising iPad sales will provide the boost that Inkling needs to get into more classrooms.  Currently, some 10% of undergraduates have iPads, MacInnis said, but by Christmas, he expects that number to double.  For now, Inkling is getting into students’ hands through advertising and partnering directly with institutions.

The funds from this round will be used to ramp up research and development by hiring engineers and scaling out the content engine by building a solid technological and human infrastructure to meet demand. 

Inkling has previously raised undisclosed rounds of funding from Sequoia Capital as well as Pearson and McGraw-Hill.