Asset Manager Investing in Global Technology Sector

We're an asset management firm allocating our capital into asset classes benefiting from technological innovation and applications globally. We serve as a family office of a tech professional who has spent over a decade as an entrepreneur, operator, and venture investor across Asia and the US.

Our small team is made up of diverse investment professionals who research, identify, and execute relevant opportunities. We occasionally share some of our investment memos, insights, and analysis here.

Wednesday, May 13, 2020

Q2.2020 - Chegg: Thinkful Is A Thoughtful Expansion

Chegg (CHGG) presents an interesting long-term investment opportunity in the US education technology space. The online 24/7 homework assistance platform has a strong balance sheet, a strong track record of execution, and ecosystem-driven growth approach, which will maintain and even accelerate its +30% growth into the future. The business is also one of the beneficiaries of the COVID-19 outbreak that has forced many students to study from home. As Q1 results showed signs of strengthened international tractions, we also expect its recently-acquired Thinkful business to solidify its moat in the domestic market further.

Execution is one of Chegg's key strengths. It was an uninteresting business over 5 - 6 years ago, where it made money mostly through renting and selling textbooks. A successful turnaround has established a digital study help platform that grows at +30% with almost 90% of revenue coming from subscription. The recently-acquired Thinkful is an attractive online coding Bootcamp business with strong synergy with Chegg's core user base. In the next two years, we expect the contribution from Thinkful and other service businesses to drive over 95% of revenue.

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