# Rafter (2006 – 2016)

- URL: https://girisimcikafasi.com/en/startup-graveyard/rafter/
- Sector: Education
- Country: United States
- Total funding: $86 million
- Cause of closure: Ran out of cash

## What did it do?

Rafter was an education technology company that grew out of the textbook rental site BookRenter. With its Rafter 360 service, which let universities add all course materials to tuition for a flat fee, it aimed to give every student access to their books from day one.

## Why did it shut down?

Having started out as BookRenter, the company raised a further $40 million in February 2011 from investors including Norwest and Storm Ventures, taking its total funding to $60 million, and competed with Chegg. It later turned to an integrated course-materials model, but according to EdSurge that model reached only a little over a dozen customers, most of them small private universities. A complex sales process requiring institution-wide approval, and resistance from faculty who saw single-source materials as a threat to their independence, slowed growth. Despite total funding of more than $86 million, the company ceased operations in October 2016, saying it lacked the time and resources to finish the job; Avila University, which had signed up eight months earlier, was given only two days' notice. In May 2017 eCampus.com bought its assets, including the Rafter360 software, and moved 8 of its 12 former customers onto its own programme.

## The story

Rafter's roots go back to BookRenter, the textbook rental site Colin Barceloux founded in Silicon Valley in 2006. Barceloux launched the site with two engineering students, Chris Williams and Philippe Huibonhoa. The San Mateo company grew by letting campus bookshops open virtual rental stores on their own websites, and in 2010 it was reported to reach around 6 million students on more than 5,000 campuses. In 2009 Mehdi Maghsoodnia took over as CEO, and Netflix co-founder Marc Randolph joined the board. In February 2011 the company raised a further $40 million from investors including Norwest Venture Partners and Storm Ventures, taking its total funding to $60 million, and became one of Chegg's main rivals.

Over time the company, now called Rafter, moved to a more ambitious model. Rafter 360 let universities add all course materials to tuition for a flat fee, so that every student had their books from day one. But the decision required the joint approval of campus management, the bookshop and faculty. According to EdSurge, the model gained traction only at small private schools, and its customer count barely passed a dozen; some faculty saw single-source materials as a threat to their independence.

In October 2016 Rafter announced in a message on its website that it was ceasing operations, writing that it did not have the time or resources to finish what it had started. By then the company had raised more than $86 million. Avila University, which had signed a contract eight months earlier, was told only two days before the closure, and schools scrambled to find alternatives.

In May 2017 eCampus.com bought the assets, including the Rafter360 software, trademarks, domain name and patents, and moved 8 of the 12 former customers onto its own programme. Rafter's technology lived on inside another company's programme, but the company that built it passed into history.

## Lessons

- Education sales that need institutional approval mean long cycles and few customers; plan your cash around the sales pace you actually achieve, not the one you target.
- If your product restricts the autonomy of end users such as faculty, winning over management is not enough; bring that group into the design process early.
- If closure is unavoidable, give customers enough time to switch; Rafter's two days' notice caught schools unprepared and damaged trust in the brand.

## Sources

- [BookRenter](https://en.wikipedia.org/wiki/BookRenter)
- [BookRenter Raises $40 Million To Take On Chegg In Textbook Rentals](https://techcrunch.com/2011/02/23/bookrenter-raises-40-million-to-take-on-chegg-in-textbook-rentals/)
- [Course Material Provider Rafter Shuts Down](https://www.insidehighered.com/quicktakes/2016/10/10/course-material-provider-rafter-shuts-down)
- [Why Rafter Failed, and What It Means for Edtech](https://www.edsurge.com/news/2016-10-14-why-rafter-failed-and-what-it-means-for-edtech)
- [eCampus.com Announces Expanded Course Material Solutions with Purchase of Rafter Assets, Including Rafter360](https://www.prweb.com/releases/ecampus_com_announces_expanded_course_material_solutions_with_purchase_of_rafter_assets_including_rafter360/prweb14290148.htm)