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☆ The edtech startup funding slowdown may be hitting the 'bottom of the market'
▼ + stars: | 2023-08-08 | by ( Madeline Renbarger | ) www.businessinsider.com time to read: +4 min

Edtech venture capital funding in 2023 may be on pace for its lowest annual total since 2016. The one exception to this edtech funding dropoff is in AI tools for education and upskilling. This puts the estimated total funding for 2023 at only $3.5 billion, the lowest annual total since 2016, according to HolonIQ. Additionally, there has not been a single edtech "mega round," or a startup funding round valued at over $100 million since 2022, with the exception of the Indian edtech unicorn Byju's $250 million fundraise this spring. Pujji and Mushin also indicated that AI edtech deals were the exception in this slowdown period.

Persons: VCs, It's, Vinny Pujji, Iynna Halilou, Leeor Mushin, Avalanche's Katelyn Donnelly, Mushin, they've, Chegg's, Cheggmate, Khan, Pujji Organizations: Left Lane Capital, Global, Bloomberg, Investors

☆ Chegg shares rebound with 17% pop after losing almost half their value on ChatGPT concerns
▼ + stars: | 2023-05-03 | by ( Ari Levy | ) www.cnbc.com time to read: +2 min

Chegg's stock price recouped some of its gains on Wednesday after the online education company lost half its value a day earlier due to concerns about the potential impact of ChatGPT on its business. As of early afternoon New York time, Chegg shares were up 17% to $10.63. The shares had plummeted following Chegg's earnings report late Monday, when the company opted not to give annual guidance because of uncertainty surrounding OpenAI's ChatGPT, the popular artificial intelligence chatbot. "I think this is extraordinarily overblown, and I don't normally say that, I don't really talk about the stock price much," Rosensweig said. WATCH: Chegg CEO on earnings stock drop

☆ Edtech Chegg slumps on revenue warning as ChatGPT threatens growth
▼ + stars: | 2023-05-02 | by ( ) www.reuters.com time to read: +2 min

May 2 (Reuters) - What's the cost of students using ChatGPT for homework? For U.S. education services provider Chegg Inc (CHGG.N), it could be nearly $1 billion in market valuation. Chegg forecast current-quarter revenue below estimates and signaled that the usage of viral chatbot ChatGPT was pressuring customer growth, sending its shares 44% lower in premarket trading on Tuesday. We now believe it's having an impact on our new customer growth rate," said Chegg CEO Dan Rosensweig. "We fear Chegg could start to lose mind-share before CheggMate fully rolls out," Thill said.

☆ Chegg crashes 49% after the education company says the rise of ChatGPT among students is impacting customer growth
▼ + stars: | 2023-05-02 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

Chegg stock crashed 49% on Tuesday after the education company said students are increasingly using ChatGPT for homework help. First-quarter earnings beat analyst estimates, but that wasn't enough to stem fears that ChatGPT is a serious threat to Chegg. The education company sells subscription memberships to an online portal that helps students study for tests and complete homework. First-quarter earnings beat analyst estimates as Chegg saw little impact on its business from ChatGPT early in the quarter. We now believe it's having an impact on our new customer growth," Chegg CEO Dan Rosensweig said on the company's earnings call.

☆ Chegg could be in big trouble as ChatGPT and A.I. threaten growth, Jefferies says
▼ + stars: | 2023-05-02 | by ( Brian Evans | ) www.cnbc.com time to read: +1 min

The rise of artificial intelligence and ChatGPT could massively hurt Chegg 's core business, meaning the stock could be in for sharp declines, Jefferies said. Jefferies downgraded the stock to hold from buy and cut its price target to $11 per share from $25. But, management sounded the alarm on the threat AI poses to Chegg's business, telling investors that ChatGPT is beginning to hit customer growth metrics. Thill said that while Chegg plans to embrace AI with its CheggMate product, the pace and depth to which the company plunges into AI isn't yet clear. The company's AI product is in collaboration with OpenAI, the developer of ChatGPT.

☆ Chegg CEO calls 48% stock plunge over ChatGPT fears 'extraordinarily overblown'
▼ + stars: | 2023-05-02 | by ( Rohan Goswami | In Rohangoswamicnbc | ) www.cnbc.com time to read: +1 min

Chegg' s 48% stock price plunge on Tuesday, driven by comments in the company's earnings report about the risks of artificial intelligence, was "extraordinarily overblown," CEO Dan Rosensweig told CNBC Tuesday. On Monday's earnings call, Rosensweig said ChatGPT, the suddenly popular chatbot from startup OpenAI, was "having an impact on our new customer growth rate." "I think this is extraordinarily overblown, and I don't normally say that, I don't really talk about the stock price much," Rosensweig said. Rosensweig noted that ChatGPT struggles with delivering accurate answers, a phenomenon known as hallucination, and a problem in the academic world. "ChatGPT is often wrong, and it's not going to be right anytime soon."

☆ Small caps will be large this year, says Jefferies. Here are 10 buy ideas
▼ + stars: | 2023-04-20 | by ( Alex Harring | ) www.cnbc.com time to read: +3 min

Small-cap stocks could beat their large-cap counterparts in 2023, according to Jefferies. Equity strategist Steven DeSanctis said small-cap stocks have cheap relative valuations while volume has slid, high-yield spreads have tightened and cyclicals have been sold off. Expectations are low with poor sentiment for small caps, DeSanctis said. Taken together with the attractive valuations, improving merger and acquisition landscape and better macroenvironment, he said he believes small caps will outperform in 2023. Given this varied landscape, DeSanctis screened for smaller-cap stocks that have lagged year to date but do well in Jefferies' modeling.

The release is poised to widen what pupils do with AI just as educators are grappling with its consequences. Rosensweig said Chegg focuses on math and the sciences, not the essay drafting that has challenged schools. Rosensweig said Chegg has structured and checked its answers to ensure accuracy. Asked if AI will prompt Chegg to shrink its pool of 150,000 experts contributing to its content, he said the company already balances humans with technology. Analysts in recent months have questioned whether Chegg can grow its base of 8 million subscribers as students embrace the largely free ChatGPT software, created by the startup OpenAI.

☆ Chegg pitches itself as an AI middleman
▼ + stars: | 2023-04-17 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, April 17 (Reuters Breakingviews) - Educational software company Chegg (CHGG.N) is trying to stay one step ahead of artificial intelligence. With its stock down 40% since ChatGPT’s November release, Chegg has a new plan to act as an intermediary between students and AI. To that end, Chegg on Monday announced a partnership with ChatGPT developer OpenAI to build a virtual tutor, CheggMate. With awareness of AI proliferating, schools will face pressure to adapt; Chegg could fashion itself as a safer way to do so. Other companies with domain-specific databases may follow suit, rebranding themselves as middlemen to avoid being made obsolete by AI.

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