Understanding Chegg's Series E Funding Valuation in September 2010

On September 2010, Chegg, the online educational tool and market leader in the textbook rental industry, successfully raised funds through its Series E funding round. The valuation of this significant round was a critical point in the company's growth journey, and understanding its details can provide insights into the broader investment landscape of the tech and education sectors.

The Valuation of the Series E Round

The post-money valuation calculated for Chegg's Series E round in 2010 was approximately 795 million USD. This figure is a testament to the growing trust and confidence that investors had in the company's potential to disrupt and innovate in the educational technology market.

According to VC Experts, there are over 40 filings to date—both state and federal—which detail Chegg's valuation and deal terms. These filings provide significant insight into the financial and strategic decisions made by the company, making it a critical resource for those interested in understanding the internal dynamics of Chegg during this period.

Post-E Valuation and Outstanding Shares

Another key aspect of the Series E round is the price per share and the total number of outstanding preferred shares. As of August 17, 2010, the most recent data on file from SecondMarket, there were 62,704,918 outstanding preferred shares. Additionally, Chegg has the authority to issue up to 95,000,000 common shares, indicating the company's flexibility in its capital structure.

The Series E price was set at 9.849 USD per share. This price, combined with the outstanding shares, provides a preliminary estimate of the post-E valuation. Based on the share price and the number of shares outstanding, my best guess is that the post-E valuation is around 1 billion USD, unless there is a better estimate of the total diluted shares.

Implications of the Valuation on Chegg's Future Strategy

This substantial valuation had far-reaching implications for Chegg's future strategy. With the injection of funds, the company was able to expand its services and further penetrate the market for educational resources. The valuation also signaled investor confidence, which could have influenced the company's ability to attract new talent and build strategic partnerships.

The rise from the post-money valuation of 795 million USD to an estimated 1 billion USD is a reflection of the success of Chegg's business model up to that point. It also highlights the growing importance of educational technology platforms in the tech industry.

Conclusion

The Series E funding round in September 2010 marked a significant milestone in Chegg's growth trajectory. The valuation of 795 million USD at post-money indicates the increasing value that investors placed on the company's innovative offerings. With an estimated post-E valuation of around 1 billion USD, Chegg was well-positioned to continue its expansion into new markets and services, further cementing its position as a leading player in the educational technology space.

The detailed information available through filings like those from VC Experts and SecondMarket underscores the importance of transparency and data-driven decision-making in corporate finance. Understanding these details can provide valuable insights not only for investors but also for aspiring entrepreneurs and business analysts.