The cost of a college education is significantly higher than it was in years past. Tuition for many universities and colleges has grown at a steady pace, and student loans debt is a recognized issue. But adding to these costs are the rising prices of textbooks. A single textbook can easily cost between $200 and $300, and this can limit educational access for some students. In fact, a significant percentage leave school because of the added expenses of necessary course materials. Understanding this, it’s not surprising that several new businesses are trying to provide digital textbooks to students. And some of the boldest now offer online textbook subscription services similar to those of Spotify for streamed music.
While several companies provide digital textbooks and other materials, one of the most successful is Perlego. This London-based startup boasts hundreds of thousands of textbooks and is looking to change the way students and institutions interact. In addition to its online textbook subscription service, Perlego hopes to be a one-stop platform for students, publishers, and educators. In essence, the company’s vision extends well beyond reducing textbook costs and improving student educational access. It dreams of being a central source for digital learning offering education without boundaries. (Dig into Bold Business’ exploration of the age of education without boundaries in this story!)
“The market for educational content has lagged other types of content, which have successfully digitized and offered new models of consumption to users. We believe that adoption of an online subscription model in this category is inevitable.” – Elizabeth Brillman, VC partner at Raine Ventures
A Snapshot of Perlego
Perlego was founded in 2017 after its two founders graduated from college. Appreciating the high costs of course textbooks, they believed there was a better way. Without question, their business thrived during the pandemic as online college programs changed. But more importantly, students immediately saw the benefit of their online textbook subscription service. Given than many books are purchased with limited overall use, streaming textbooks and other materials simply makes sense. This is what made Perlego the most popular and largest digital textbook resource today.
By all accounts, the company looks to be thriving. It currently has over 400,000 subscribers to its platform. It also has over 850,000 titles in its library of digital textbooks and other materials. At the same time, Perlego works with several major textbook published including names like Cengage, Routledge, and Elsevier. In total, there are over 5,000 educational publishers with books on Perlego’s online textbook subscription service. But there’s more. The company also partners with more than 6,000 educational institutions in 172 different countries. These collaborations has been a big reason why Perlego has seen a 450% growth rate in 2021 alone.
“A big issue for publishers is that they price textbooks high in part to offset piracy. A model like ours not only prevents piracy, but it reduces the need for second-hand books.” – Gauthier Van Malderen, Cofounder of Perlego
A Win-Win for Textbook Publishers
Developing such a large number of digital textbooks in its online textbook subscription service wasn’t easy. Initially, textbook publishers were reluctant to partner with Perlego. But it soon became clear that Perlego offered several advantages that addressed publisher concerns. One of the most notable ones involves piracy of textbooks. Because costs of these materials have been so high, bootleg sites attempt to illegally sell pdf’s and texts to students. In 2021 alone, more than 2 million searches for piracy offerings by students were intercepted by Perlego. Because Perlego is able to make textbook costs reasonable, the incentive for illegal textbook copies have become less.
At the same time, Perlego is attractive to textbook publishers for other reasons. Publishers must also battle second-hand sales of textbooks among students also. Given that academic texts are highly specialized and written by professors and experts, development costs are substantial. Likewise, unlike other books, textbooks have much more limited printing volumes. All of this forces publishers to raise their prices for textbooks, making second-hand sales at lower prices very attractive. But digital textbooks accessed via Perlego are even cheaper than these offerings. This also made the company’s online textbook subscription service appealing to major publishers.
“Perlego is changing the equation for university students, helping them access course resources, while also enabling publishers to move online and harness new revenue opportunities.” – Paul Verwilt, COO at Mediahuis
Perlego’s Vision for the Future
Perlego’s online textbook subscription service has been a success by itself. Students can pay $18 a month to receive unlimited access to the company’s library of digital textbooks. This has been enough to stimulate major growth and to earn the company an additional $50 million in Series B funding. But the company’s founders, this is just the beginning. The dynamic platform they hope to provide is one that invites greater functionality to the entire educational system. This includes expanding offerings beyond digital textbooks to other academic materials. And it also involves developing a more interconnected network among academic institutions.
Perlego foresees being able to offer students not just digital textbooks but also videos and a variety of pdf’s. By signing up for the company’s online textbook subscription services, these might also be accessed. Alternatively, the company might develop tiered pricing and include these in its premium services. At the same time, the cofounders believe educational institutions could utilize their platform for grading and assignments. Given that Perlego would have easy access to digital textbooks, this could streamline entire online college campuses. Without question, it will be interesting to see where Perlego goes next.
The Competitive Landscape for Perlego
It’s worth noting that Perlego has some sizable competition in the area of digital textbooks and online textbook subscription services. Chegg, Open Library, and Libre Texts are among the best-known companies in this industry. But despite being relatively new to the market, Perlego has amassed more digital textbooks and more subscribers than the others. This includes the U.S. student market as 40% percent of all Perlego users reside in America. This is why investors believe Perlego may be the Spotify of online textbook subscription services in the future. In any case, all of this is great news for college students worldwide. It’s a bold idea that’s certainly overdue.