The company started out as an online book rental service competing with the likes of Chegg. Rafter is continuing with the Bookrenter business as a consumer brand, which is used by 5,000 campuses, but is renaming the company as Rafter as it aims more broadly beyond renting books.
Rafter now sells a cloud-based platform for college administrators, professors and students to access and manage content--both digital and physical products. The Rafter network aggregates demand for textbooks from colleges to get cheaper prices and it also finds the cheapest available outlet for students to get a book. Rafter's platform is free for now and it does a revenue share on transactions with schools.
What this means is that students can see available options to buy or rent, and choose a particular book from in-store or online, new or used, and compare their own campus price with other outlets such as Amazon.com. Professors can request books online to have the school order them. They can also share information with each other and see what books other professors are using for particular courses. Rafter also includes data such as where a book is in its "life cycle" and compare books side-by-side.
"Instead of (colleges) talking to 20 different suppliers about different formats for price and contract terms and delivery, we're rationalizing all that," Maghsoodnia says. "We have all the pricing information and manage the shipping, distribution and contract terms."
Because the company has been providing books for purchase and rental at schools, it has created a real-time purchasing technology. In other words, the school does not have to allocate a certain number of books for sale and a certain number for rent. Rafter provides the price for a sale and rental and with either choice, Rafter allocates that book to the relevant category.
Bookrenter, which last February raised $40 million from Storm Ventures, Adams Capital Managment, Comerica Bank, Lighthouse Capital Partners, Norwest Venture Partners and Focus Ventures, has built a range of technology for this platform, including ecommerce systems, mobile and iPad apps and a back-end reporting system for administrators. It's an enterprise system, as you would find in a corporation or the healthcare industry, Maghsoodnia says.
Digital textbooks is a busy area, as Apple recently announced that it will add textbooks from major publishers Houghton Mifflin Harcourt, McGraw-Hill, and Pearson to its iBooks software. Meanwhile, Chegg also has added digital books. Rafter will support 90% of the demand for ebooks on campus, Maghsoodnia says. Currently, digital is still a small portion of campus content and different departments often use different digital formats on the same campus, he says. As more and more content moves to digital formats and they adopt standards, Rafter will include that content on its platform, he says. Having one central tech platform makes it much easier to manage a range of digital content and licenses, Maghsoodnia says.