Poor college students rejoice! The textbook renting market is mounting a serious buildup in the name of lowering costs of textbooks by renting them out instead of selling. Over the weekend, two textbook rental sites at different development stages raised funds to expand their services.
The younger of the two, Campbell, CA-based BookRenter, just raised $6 million in Series A funding from Storm Ventures and Adams Capital Management.
Chegg, the veteran amongst the two, was only founded a year earlier, in 2005. Having secured $57 million in Series D equity funding, however, Chegg's latest financial news dwarfs BookRenter's fundraiser. On top of the equity funding, a $25 million credit facility from Insight Venture Partners and $30 million in debt facility recently secured from Pinnacle Ventures and TriplePoint Capital brings Chegg's total recent new funds to a hefty $112 million.
As part of the fundraisers, Deven Parekh of Insight Venture Partners will join Chegg's Board of Directors.
BookRenter and Chegg both function on the idea that students are usually strapped for cash, in times of recession or not, and more than willing to part with their class resources at the end of the semester.
Both sites feature a search engine prominently on their front pages and texts are searchable by title, author, and/or ISBN. Both companies utilize UPS shipping to ensure fast delivery and both promise free returns of textbooks by sending along return packaging with each rental. On top of all that, both companies hope to draw in liberal-minded college students by playing the 'go green' card: Chegg says it will plant a tree for every book its users rent, sell, or buy.
Though Chegg will certainly provide some strong competition, BookRenter claims to have seen 300% growth year-over-year. There is clearly a market for this kind of business and it's only a matter of time before we see one or two major players come out on top.