How ChatGPT wiped out Chegg

Chegg's stock is down over 95% since 2021 - most of it attributed to ChatGPT. What happened?

May 2023, Chegg ex-CEO Dan Rosensweig: “We saw a significant spike in student interest in ChatGPT. We now believe it’s having an impact on our new customer growth rate.”

Turns out he was right.

Today, the company, known for textbook rentals, homework assistance and online tutoring, is running on fumes.

And it shows in the numbers:

ChatGPT

Grew to 200 million WAU this year
Website now ranks #10 worldwide
Over 4 billion website visits in Oct 2024
Anticipating ~$3 billion revenue

And Chegg?

3.8 million subscribers, down 598k YoY
Website ranks #1,224 worldwide
35m website visits in Oct 2024
~$136m Q3 revenue (-13% YoY)

Currently, Chegg's market cap sits at ~ $160m... ...Almost$ 13 billion wiped from previous highs.

A sad fact: In 2022, employees actually asked for resources to develop AI tools, which was denied by leadership (source: WSJ).

Is search next? "Let me GPT that for you" doesn't have the same ring as google, but there's plenty of push by LLM providers.

Author

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