Chegg Planning To Raise $172.5M In IPO

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Chegg is a startup that focuses on textbook rentals.  The company has announced today that they are planning to raise up to $172.5 million in an initial public offering (IPO).  The price of their stock is set to $9.50 to $11.50 per share.  At the mid-point, Chegg would be valued at $906.2 million.

If the IPO is stronger than expected, Chegg’s underwriters can sell additional shares to push the offering’s potential proceeds up to $198.4 million.  Chegg is going to start a roadshow to pitch their offering and meet with investors across the country.

Chegg CEO Dan Rosensweig used to be a former executive at Yahoo!  Chegg’s investors include Kleiner Perkins Caufield & Byers, Insight Venture Partners, and Pinnacle Ventures.

Chegg was founded in 2005 and they let students rent textbooks for a semester at a time.  They have 180,000 books in their catalog and are building their electronic services.  Chegg has over 100,000 e-books.

Chegg now reaches around 30% of all college students in the country and 40% of college-bound high school seniors.

Chegg hit $22.7 million in adjusted earnings before interest, taxes, depreciation, and amortization for the 9 months ended September 30th.  This is up almost fourfold from the results in the period a year earlier, according to The New York Times.

Based on GAAP, Chegg’s loss narrowed 12% to $50.4 million.  For the first nine months of the year, Chegg’s net revenues jumped 23% to $178.5 million.

The IPO is being led by JPMorgan Chase and Bank of America Merrill Lynch.

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