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Why Rafter Failed, and What It Means for Edtech

Rafter ranked among the most substantially-backed education companies in recent memory, having raised more than $86 million dollars since it started a decade ago. Then last week, the company, which helped colleges save students money on textbooks, abruptly shut down. While its customers scramble to find alternatives, observers wonder what can be learned from Rafter’s demise.

The company set out to solve what is clearly a problem at colleges. The sticker price for textbooks has risen dramatically over time—one estimate based on Bureau of Labor Statistics data put textbook prices as 1,041 percent higher in 2015 than in 1977, far greater than inflation, or the price of recreational books.

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