Chegg.com, an online rental service for textbooks, has picked up $25 million in a third round of funding. Kleiner, Perkins Caufield & Byers and Foundation Capital led the round, along with participation from existing investors Gabriel Venture Partners and Primera Capital. The Santa Clara-based startup was founded in 2005, and rolled out a version of its service under the Textbookflix brand (a play on Netflix) in mid-2007, but that site is now defunct. Instead, students go directly to Chegg.com to rent textbooks for “65 to 85 percent” cheaper than they cost in the bookstore. They can also sell their old books to the service.
Chegg.com raised $2.2 million in funding from Gabriel Venture Partners and angel investor Mike Maples back in January 2007 (per VentureBeat), but the amounts of any interim rounds have thus far been undisclosed. The startup says students from over 4,000 universities have used its service, and while there are currently a few similar sites (CampusBookRentals.com and BookRenter.com, for example), it’s a business model that could pick up dramatically given the economy. The company said it will use the new cash to build out its catalog, improve customer service and to try to maintain its stake as a leader in the space. Release.