Daniel Bernstein spent much of the past decade running sale processes for other people’s software companies. Then he ran one for his own, and it just resulted in a deal with McGraw Hill.
The education publishing giant on Wednesday announced the acquisition of Teachally, a small startup led by Bernstein in Bothell, Wash., that uses AI to help teachers build and customize lessons, assignments and assessments aligned to state standards.
Financial terms weren’t disclosed. The deal has closed, and all five employees have joined McGraw Hill, with Bernstein taking the title of senior advisor for Teachally integration and growth. He declined to say what the company sold for or how much it had raised, but said the outcome was good for him and his investors.
“We didn’t take in a pile of money,” Bernstein said, explaining that the company brought in a small group of angels and was able to stay focused and effective.
The five-person team is spread across three continents: Bernstein and a colleague in the Seattle area, co-founder and CTO Rushil Makkar in Melbourne, Australia, a customer success lead in Arizona and a developer in Ethiopia.
Bernstein is best known in Seattle tech circles for Sandlot Games, the game studio he started in a spare bedroom in Bothell in 2002 and sold to Digital Chocolate in 2011, after developing casual gaming hits including “Cake Mania” and “Tradewinds.” He later founded the mobile game startup UpTap.
Bernstein spent the following decade on the other side of deals, as a software M&A advisor at Corum Group and then at his own firm, Hemisphere Partners, which ran Teachally’s sale.
Teachally raised a small round from local angels about nine months ago, and later opted to try an M&A process. An edtech M&A specialist representing the company approached a small group of potential buyers, and Bernstein said he hit it off immediately with McGraw Hill over a shared view of what curriculum and instruction should look like in the age of AI.
Teachally focuses on teachers rather than students, developing technology for what the industry calls high-quality instructional materials, or HQIM, which is the standards-aligned curriculum that many states and districts have pushed schools to adopt.
The startup was working with about eight school districts at the time of the sale — fully commercialized, Bernstein said, but “still very much an early stage company.” It was named a top edtech product for curriculum and instruction by District Administration magazine in January.
Bernstein said he had to learn an entirely new industry after two decades in games. The M&A work helped: he’d taken other edtech companies to market before building one.
Teachally itself started as something else. The company was founded as EZ Reward, maker of EZ Stickerbook, a digital sticker chart teachers used to reward students and message parents. Bernstein pivoted the company about three years ago to focus on AI for teachers.
McGraw Hill, which went public last year and reported $2.1 billion in revenue in its most recent fiscal year, said the deal will let it develop and localize K-12 curriculum faster and put AI tools in front of teachers already using its content.
“This acquisition provides a great opportunity to accelerate our AI strategy in ways that directly support educators and strengthen how we develop and deliver our K–12 products globally,” said Jana Thompson, interim president of the company’s School group, in the announcement.
Teachally is now live as a McGraw Hill product, with its own page on the company’s site.
Bernstein said it’s a second exit both for him and for some of the angels who have backed him along the way. “It’s a good Seattle story once again,” he said.
