What is Akademos and what is the online bookstore industry landscape right now?
Akademos provides outsourced online bookstores, marketplaces and other course materials to academic institutions. The company also operates a consumer marketplace for deeply discounted college textbooks called TextbookX.com. The college bookstore market is in the midst of a transition from physical stores to online sources. The vendors that will be successful negotiating this transition, in my view, are those that do not simply replicate the process and structure of physical stores online but rather use the medium of the Internet in its own right in order to create something completely new.Â
Academic administrators across the country increasingly face a tension: on the one hand they are seeing revenue and profits from their physical stores decline year after year as students seek lower cost books online; on the other, they are facing ever greater complaints from students and their parents about the cost of books. Â More purchasing options are emerging: marketplace, rental, ebooks, open source content; but what educational institutions require is a trusted partner and advisor that can help schools make the best decisions regarding course materials to satisfy their particular objectives and needs.
The company recently received $2.5 million in venture funding from Kohlberg Ventures. As a startup company how challenging was it in terms of finding financing in the current economy?
This is obviously a very challenging time to raise funds of any kind, whether it is equity or debt financing. Still, we were in the fortunate position to have interest from more than one venture fund and I do think there is money available for companies, especially for those that can help make a difference during challenging economic times. Our business helps reduce costs both to administrators and students, and our market (education) tends to hold up well during economic downturns. Â I think these factors played a role in our relative attractiveness to the investment community.
 How will Akademos use the investment?
We’ve spent a number of years building what is now a robust technology platform–a platform that will, to be sure, continue to evolve and which will require additional resources as we grow. Our principal task now, however, is to let the appropriate decision makers in our market know about us, our capabilities and why we’re different than anything else in the market. We’ll be using the funds then, to help tell our story to the education community.
What are the financial incentives for students to use a peer-to-peer marketplace for books?
Students are not naturally inclined to circumvent the officially-sanctioned textbook store. When they go online elsewhere, they face the possibility of ordering the incorrect book and experiencing shipping delays, or worse. They are also unable to use financial aid or a campus card for their purchases. The reason students are increasingly ordering through online marketplaces is that the economics are overwhelmingly in their favor. On our marketplace, which now has more than 600,000 registered users, the average savings for a student is more than $60 per book (about 62 percent less than full retail prices); when students sell books through the marketplace, they earn an average of $14, or 60 percent, more than they would through traditional college store buyback programs (assuming the wholesale buyback prices). Â A marketplace can dramatically lower the total cost of textbook ownership for students-lower even than rentals or eBooks.
