HubEdu Departs San Diego’s Downtown Incubator After Bay Area Buyout
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operate as a division of Rafter. BookRenter has been growing fast, establishing partnerships for its online book rental services with 560 campus bookstores serving six million students. As my colleague Wade Roush reported last year, BookRenter also faces some stiff competition in Santa Clara, CA-based Chegg, which has a customer base about five times larger than BookRenter’s. Like Rafter, Chegg also has been expanding beyond a narrow focus on textbook rentals into more of a full-service technology platform for colleges and universities.
Chegg also has raised more cash—between $150 million and $195 million—from investors that include Kleiner Perkins Caufield & Byers, Insight Venture Partners, and Gabriel Venture Partners. In comparison, Rafter has raised at least $56 million from investors that include Storm Ventures, Adams Capital Management, and Norwest Venture Partners.
HubEdu deal was Rafter’s first strategic acquisition. Terms of the deal, which Simkin described as more of an asset sale, were not disclosed. One key asset—if not the key asset—that Rafter sought was pricing analytics technology the HubEdu had developed to help campus bookstore managers compete more effectively with online pricing.
The Web-based analytics, rebranded as Rafter’s “Price IQ,” enables a bookstore to compare the price of every title in its inventory with prices available to students from other sources. The free service is intended to help managers identify books that are priced below the online market and increase overall revenue by adjusting the price of those books.
As part of the transaction, three of HubEdu’s four employees, including Simkin, have moved to the Bay Area to join Rafter.
“It’s exciting to be the first graduate of EvoNexus,” Simkin says. “It’s sad to leave San Diego. I absolutely love it here and I definitely plan on coming back.” Although the Bay Area continues to attract some of San Diego’s more-promising tech startups, he says, “It’s good to know that San Diego companies can succeed and we can do good work.”
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