TeachStreet is an online service and marketplace for matching students with teachers around various activities, from yoga to language lessons as well as providing tools and lesson plans to teachers. The service featured more than 150,000 classes in Seattle, San Francisco, Chicago, Denver, New York, Philadelphia and Portland.
On February 2nd, it was announced that Amazon would be acquiring the five year old startup for an undisclosed sum, shutting down the service and integrating the team into the AmazonLocal division, which provides daily deal service in more than 40 US cities. Amazon most likely acquired the company as more of a talent acquisition given its announcement to shutter service on February 15th, less than two weeks after the acquisition. However, the underlying platform technology is valuable as it provides a critical, missing component for AmazonLocal’s service: helping customers find local experts, such as career counseling, kitchen remodeling or car purchase negotiations. This same technology is also being used by The Washington Post for its Service Alley leads service. This technology and expertise of the TeachStreet team will provide Amazon a new capability to rapidly make its local services more relevant to consumers.
TeachStreet’s founder, Dave Schappell, previously worked for Amazon as a director of product development and the startup had raised over $3 million from Madrona Venture Group, Hulu CEO Jason Kilar and others including Amazon’s own CEO Jeff Bezo through his Bezos Expeditions fund. It is clear the Amazon connection played a role in the acquisition as the startup had been seeking a buyer since last February, when Google altered its ranking algorithm, resulting in a devastating impact to TeachStreet’s traffic volume. The company never fully recovered and while trying to seeking partnering opportunities to boost traffic, found that companies were more interested in acquiring the company outright.
Interesting to note as well is Schappell is a very active member in the Seattle startup community, as he hosted a weekly Hops & Chops Thursday happy hour on Capitol Hill.
You can expect to see AmazonLocal begin offering classified ad types of services for local experts combined with powerful search capabilities and vendor tools enabling providers to easily promote their service and offer deals or specials on the AmazonLocal platform and through its affiliates, thereby helping service providers to extend their reach and marketing capabilities. These additional services will give AmazonLocal a boost as it seeks to expand its capabilities and differentiate itself in the highly competitive daily deals space.