Pakistani-American Founder Osman Rashid's Chegg Files for IPO
By Riaz Haq
Book rental companies like Silicon Valley based Chegg, founded by Pakistani-American Osman Rashid and Indian-American Aayush Phumbhra, are helping American college students deal with rising textbook costs. Their business is inspired by Netflix movie rental business. Other major contenders in this space are Bookrenter, Textbooks.com , eCampus, BookByte, Direct Textbooks, Student Book Trades and Textbook Recycling.
Osman Rashid is the son of a Pakistani diplomat. He was born in London and raised in Islamabad. He came to the United States from Pakistan in 1990s to study electrical engineering at University of Minnesota and earned a BSEE there.
Rashid is a serial entrepreneur who has founded four companies so far. He left Chegg in 2010 to start his current gig as CEO at Kno which he also founded along with fellow Pakistani-American Babur Habib. Habib has a BSEE from University of Minnesota, MS from Stanford and PhD from Princeton. He serves as CTO at Kno. The Silicon Valley-based company offers electronic textbooks and associated software for K-12 and college courses. It is backed by Intel, Goldman Sachs and Netscape founder Mark Andreeson's VC firm Andreeson Horowitz.
In its filing for initial public offering, Chegg says it plans to raise nearly $200 million by offering its stock for sale at $9.50 to $11.50 a share. At the midpoint of the range, that would value Chegg at nearly a billion dollars.
The name Chegg combines chicken and egg. It rents textbooks for a semester at a time at about 50% off the retail price. It has 180,000 titles in its catalog. It also offers more than 100,000 electronic textbooks and has rolled out offerings like helping high school students find colleges and scholarships, according to New York Times .
Like its competitors, Chegg offers book return guarantees and shipping speed. Chegg is a selling point for your own books as well as textbook rentals at low prices. What differentiates Chegg is that it offers course reviews and grade distributions as well as homework help for selected courses. Along with first hand reviews of a course, you get a detailed schedule of the books you need for it. Chegg claims it now reaches about 30 percent of all college students in the United States and 40 percent of college-bound high school seniors.
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