London-based startup Perlego is bringing the Spotify model to the antiquated textbook industry.
The education platform offers an unlimited subscription service that gives users access to more than 300,000 eBooks, from over 2,300 publishers including Pearson, Wiley, and Sage. Perlego is currently only operational in Europe, but plans to replicate its strategy in the U.S., where it sees an even bigger opportunity to sell subscriptions.
"Our core focus right now is to build Perlego in Europe, hopefully come to the U.S., and then tailor the needs for the hundreds of millions of students across the world," said the company's founder and CEO Gauthier Van Malderen in an interview with Cheddar.
He says students spend $1,200 a year on books, "so there's a huge demand" for a textbook subscription service, although he notes, "In the U.S., the price point will probably be a bit higher" than in Europe.
Van Malderen said Perlego, which recently raised $9 million series A, is rescuing textbook publishers from slipping sales by helping companies reach a new group of consumers, while also protecting against piracy.
"If we look at textbook prices, they've increased by 847 percent since 1982, or three times the rate to inflation," he said. "We're also seeing all major publishers see their revenue decline due to two reasons: one, piracy. Piracy has been growing through the roof. But also second-hand book sales."
Malderen estimates the loss of revenue to be about 55 percent for textbook publishers and sees Perlego as a solution for its publishing partners to recoup money by signing on with the service.