BookRenter.com, an online textbook rental service for students, has landed a big fish for its board: Netflix co-founder Mark Randolph. The former CEO of the online movie rental company retired in 2002 and since then has been investing in and advising a number of startups. BookRenter founder and CEO Mehdi Maghsoodnia said the addition of Randolph to the board was an endorsement of the company’s Netflix-style service for textbooks.
The idea behind BookRenter is one that would likely appeal to any university student (or parent of a university student) who’s had to shell out hundreds of dollars for textbooks that are used a handful of times, or where only a few pages are required for a course. It probably doesn’t appeal to textbook publishers, however, since it effectively cuts them out of the loop — just as Netflix does to movie distributors. BookRenter says it has 3 million books available for rent and offers next-day shipping and free UPS returns. Books can be rented for up to 125 days, at what the company says is a saving of up to 75 percent over buying the book.
The startup, which was founded in 2008, raised $6 million in a Series A financing round last fall from Storm Ventures and Adams Capital Management, and says it’s growing at 300 percent quarter-over-quarter. Its larger competitor is a company called Chegg.com, which has raised a total of $144 million in equity and debt financing. The two have clashed over the claim to who is No. 1 in the market — Chegg recently sent BookRenter a legal letter claiming that it owned the rights to the phrase “Number 1 in textbook rentals.”
The textbook rental market could soon be getting a lot more competitive for both companies: Barnes and Noble has been testing a rental service as well.
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