In a few weeks, thousands of students will enter the college campuses of our country, dreading the hundreds of dollars they’ll have to spend on textbooks, several of which they’ll barely open.
But one startup, Packback, just closed $1 million in seed funding to attempt to help these young adults. Its short-term digital textbook rental business has a presence today in 80 college campuses and touts 1,500 customers.
Unlike the traditional e-textbook model in which students can download textbooks in digital form for slightly lower prices than they’d pay for hard copies, or the hard-copy semester-long rentals many college bookstores offer for half the price of the purchase, Packback charges between $3 and $5 for a 24-hour rental of a digital textbook.
While this model might not work for all classes (we’ve all had those classes that required us to be glued to our textbook every night), it could be a good alternative for many classes where professors assign reference books that end up being used only for a paper or project.
Packback is currently partnered with McGraw-Hill Higher Education, one of the largest publishers of college textbooks, a deal it struck back in March 2012, and the two companies piloted a program at Illinois State University, where the founders went to college, starting in August 2013. During the pilot program, Packback offered textbooks for 21 courses on the campus. The company is also currently working on teaming up with additional pilot partners.
“There’s a severe public misperception of the higher education publishing industry as being overly conservative and stagnant in evolving towards digital. We’ve found this to be simply untrue and are excited to have established strong working relationships with some of the most innovative thought leaders in the space,” said Pacback co-founder Mike Shannon in a statement.
“These companies have truly evolved from traditional publishing companies to digital learning companies, and we’re pleased with Packback’s role in the industry’s continued evolution,” he said.
As mentioned, Packback is not the only player in the digital textbook field. Companies such as Boundless, Flat World, Flooved, and Chegg, among others, are all taking on the digital textbook challenge with their own flavor of business model. Even tech giants Apple and Amazon are in the game, offering digital textbooks through their respective e-reader platforms. Last week, Chegg, which went public last summer and is best known for its print and digital textbook business, reported $64.5 million in total revenue for Q2 2014, with roughly 29% of it coming from digital, slightly missing its digital revenue guidance for the quarter.
Packback appeared on ABC’s Shark Tank television show, during which it secured famed investor Mark Cuban’s investment of $250,000, a significant chunk of the $1 million in funding the company has just closed. Howard Tullman, Mark Achler, Mark Tebbe, Rishi Shah, and several other angel investors also contributed to the round.
Packback was founded in 2013 by Kasey Gandham, Mike Shannon, and Jessica Tenuta, and is located in Chicago, Ill.