Chegg

 Chegg: When a Subscription Moat Met Free AI

Chegg was a US-based online education company that built its business around paid academic support — textbook rentals, homework help, step-by-step solutions, and tutoring for university students. Founded in 2005 and listed on the New York Stock Exchange in 2013, Chegg became a staple of the US student ecosystem during the 2010s.

At its peak in 2021, Chegg was valued at over $14 billion, powered by subscription growth, pandemic-era remote learning, and the belief that education support was a durable, high-margin recurring revenue business. Investors saw a classic SaaS-style model: sticky users, predictable cash flow, and pricing power.

They were wrong.

Why the Money Was Lost

Chegg didn’t fail slowly — it was disrupted almost overnight.

Generative AI made its core product obsolete. Tools like ChatGPT offered instant, free explanations across almost every subject Chegg monetised.

The value proposition collapsed. Why pay monthly for answers when AI could explain concepts conversationally, repeatedly, and at zero cost?

Students churned fast. Chegg’s subscribers were young, price-sensitive, and highly adaptive. Loyalty evaporated.

Brand and content moats proved illusory. Years of curated solutions were no defence against probabilistic, on-demand AI reasoning.

Pricing power vanished. Chegg couldn’t raise prices, and discounts only accelerated margin erosion.

Growth assumptions broke instantly. What looked like a linear decline was actually a structural demand cliff.

Crucially, this was not a recession story, nor a cost-inflation story. It was technological substitution — the most brutal kind. The product didn’t get worse; it simply became unnecessary.

The Market Reaction

From its 2021 highs, Chegg’s share price fell by over 95%, wiping out billions in market value. Revenues stagnated, guidance was repeatedly cut, and the company was forced into layoffs, restructuring, and strategic retreats. The stock chart didn’t show panic — it showed a long, grinding realisation that the business model no longer had a future moat.

Chegg still exists, but as a shadow of its former self — a reminder that even profitable, subscription-based platforms can be rendered fragile when the underlying problem they solve disappears.

The Lesson

Chegg wasn’t destroyed by poor management, excessive debt, or macroeconomic weakness. It was destroyed by abundance.

When answers became free, instant, and conversational, the idea of paying for them collapsed. In that moment, Chegg joined a growing list of companies that didn’t just lose customers — they lost relevance.

This wasn’t a bad quarter.

It was the end of an era.

The Revel Collective, in administration

Revolution Bars → The Revel Collective: From AIM Darling to Administration

The Revel Collective, formerly known as Revolution Bars Group, was a UK-based operator of late-night bars and casual dining venues, best known for the Revolution and Revolución de Cuba brands. Founded in the late 1990s and floated on London’s AIM market in 2016, the group expanded to around 65–70 sites nationwide at its peak, selling a scalable, cocktail-led nightlife concept to public-market investors.

In October 2024, the company rebranded to The Revel Collective plc, signalling a strategic reset. But the problems were not cosmetic — they were structural.

Why the Money Was Lost

The decline was driven by a slow but relentless collapse in unit economics:

People simply go out less. Post-Covid habits shifted permanently toward home-based socialising, streaming, and cheaper experiences. Late-night venues never recovered mid-week footfall.

Cost-of-living pressure squeezed discretionary spending. Cocktails became an occasional luxury, not a routine purchase.

Rents and business rates remained fixed while revenues became volatile — a fatal mismatch in hospitality.

Energy costs surged, hitting bars disproportionately due to refrigeration, lighting, and extended opening hours.

Labour costs rose sharply, both from wage inflation and staff shortages.

Debt servicing became punitive as interest rates normalised, removing the financial oxygen that had sustained the model.

What investors slowly realised was that this was not a cyclical dip but a permanent reset in consumer behaviour. A business designed for high-volume, high-frequency nightlife was now operating in a lower-traffic, lower-spend world — with no ability to shrink its fixed cost base fast enough.

By January 2026, after years of falling revenues, repeated refinancing, and shareholder dilution, the board filed a notice of intention to appoint administrators. Trading in the shares was suspended, effectively locking in a near-total destruction of shareholder value.

What began as a £200m-plus AIM growth story ended as another case study in how leverage, fixed costs, and changing habits can quietly turn a listed brand into a stranded asset — long before the doors finally close.