Chegg, of which Daniel L. Rosensweig ’83 is president and chief executive officer, held an initial public offering (IPO) on Wednesday, Nov. 13. Chegg is an academic company based in Santa Clara, Calif., specializing in online textbook rentals, homework help, and scholarships. An article in the San Jose Mercury News the previous day noted the company “earned a solid grade from investors Tuesday, selling its first batch of shares for more than it expected and raking in nearly $200 million.”
Rosensweig was named the 2013 Entrepreneur of the Year by TechAmerica, the leading technology association in the United States. In announcing the award, it was noted Rosensweig propelled Chegg as a global leader in its industry. Prior to joining Chegg, Rosensweig was president and chief executive officer of Activision Blizzard’s Guitar Hero franchise. His professional life has been focused in media communications and Internet industries, including roles as chief operating officer of Yahoo!, president of CNET, and chief executive officer of ZDNET. In addition to his significant career, Rosensweig participates on the advisory board of the non-profit DonorsChoose.org and is former co-chair of the ONE Campaign to fight global AIDS and extreme poverty.
In 2008, he dedicated the Rosensweig Learning Commons at HWS. Located on the first floor of the Warren Hunting Smith Library, the Rosensweig Learning Commons has revolutionized the ways in which students and faculty members interact with one another and with information. He has addressed the campus during the President’s Forum Speaker series, and has served on the Colleges’ Board of Trustees since 2011.
During his time as a Hobart student, Rosensweig was a political science major, a member of Kappa Sigma fraternity, and studied abroad in London.
San Jose Mercury News
Chegg books nearly $200 million in Silicon Valley’s first post-Twitter IPO
Jeremy C. Owens and Peter Delevett • Staff writers • November 12, 2013
SANTA CLARA — Chegg, a Silicon Valley startup focused on higher education, earned a solid grade from investors Tuesday, selling its first batch of shares for more than it expected and raking in nearly $200 million.
The 8-year-old company announced Tuesday the sale of 15 million shares at a price of $12.50 apiece, $1 higher than the price range expected in earlier filings of $9.50 to $11.50. At that price, Chegg’s initial public offering raised $187.5 million and valued the company at nearly $1.1 billion, and its shares are expected to begin trading Wednesday on the New York Stock Exchange under the ticker symbol CHGG.
Chegg’s IPO arrives in the wake of a loud public debut for Twitter, the San Francisco microblogging service that raked in $1.8 billion last week, then saw its stock price shoot up by more than 70 percent on its first day of trading. Experts say that success could have a positive effect for other Web companies that focus on consumers, like Chegg.
“When the market is optimistic, the whole sector is going to benefit from it,” Jay Ritter, a University of Florida finance professor who studies initial public offerings, said last week.
Founded in 2005 by a group of Iowa State students, Chegg’s main focus for most of its history has been on changing the system for dispersal of college textbooks. While bookstores typically sell textbooks to college students and buy them back for a much smaller price at the end of a semester, Chegg began renting the textbooks to students for a smaller per-semester fee.
By leveraging the Web, Chegg was able to expand its presence nationwide, and has also grown its offerings to include study help and assistance for high school students looking to gain entry to college.
With its growth, Chegg has managed to capture the attention of an audience of young men and women that advertisers crave: The company said in its prospectus that it reaches 30 percent of all college students and 40 percent of college-bound high school seniors.
Chegg’s approach has yet to lead to profits, however. Chegg’s net losses grew each of the past three full years, but the company also managed to increase revenues sequentially as well. In 2012, Chegg lost $49 million on revenues of $213.3 million, and the Santa Claraq company lost $50.4 million in the first nine months of this year while generating revenues of $178.5 million.
Chegg has landed some $200 million from the likes of Floodgate, Foundation Capital and Kleiner Perkins Caufield & Byers. The company’s board also includes ex-Netflix (NFLX) CFO Barry McCarthy and 49ers CEO John York.
The company is selling all but 600,000 shares in its IPO, with the rest belonging to cofounder Aayush Phumbhra, who will retain nearly 2 million more shares after the IPO. Chegg’s other cofounder, Osman Rashid, sold an education-focused startup he founded after Chegg to Intel (INTC) for an undisclosed amount last week.
Staff writer Brandon Bailey contributed to this report. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.
In the photo above, Daniel Rosensweig ’83 (right) is featured.