Purpose: The purpose of the study is to determine how students perceive groupwork and identify patterns of less successful groups in online challenge-based learning. Design/methodology/approach: This study involved 29 university students working in nine teams in an online challenge-based course. The authors applied Volet's (2001) Student Appraisal of Group Assignments (SAGA) instrument to measure students' perceptions on six constructs: Cognitive Benefits, Motivation Influence, Affect, Interpersonal, Management, and Group Assessment. Questionnaires were administered at different time points (before, during, and after the project). Focus groups were conducted to gain insights into students' experiences. Findings: Findings suggest that students reporting decreasing or stalling perception scores on the Motivation Influence, Interpersonal constructs would likely not be in high-performing groups. Additionally, challenge-based learning is less suitable for time-compressed courses. Originality/value: The study expands the understanding of students' perceptions of online challenge-based learning, at different performance levels, and difficulties in these projects. Practical implications of this study are support for teachers in identifying struggling teams, and designing and facilitating challenge-based courses.