Why a16z-backed Wonderschool is acquiring EarlyDay

Wonderschool, a startup that provides software and support to help individuals and local governments spin up childcare businesses, has acquired EarlyDay, which operates an early childhood educator marketplace.

TechCrunch has covered Wonderschool since its infancy, including both of its seed rounds and its Series A (led by Andreessen Horowitz).

Terms of the deal were not disclosed, but in an interview with TechCrunch’s Equity podcast, EarlyDay’s co-CEOs Emma Harris and Melissa Tran described the transaction as “opportunistic,” saying it was not driven by fundraising needs. Wonderschool’s CEO, Chris Bennett, declined to share details of the deal’s structure, but implied that it was executed for a non-trivial sum.

We brought Harris, Tran and Bennett onto the show to chat about the deal, what’s ahead for their sector, the U.S.’ childcare quandary and more. Tune in!

Back in early 2022, Wonderschool raised a $25 million Series B at a $165 million post-money valuation, according to Crunchbase data. EarlyDay raised a $3.3 million seed round later in 2022.

Edtech and other startup categories have been overshadowed by AI technology over the past year or so, but there is still a massive market and need for better childcare and other early-childhood services. Parents have been worried about the availability of childcare as certain federal programs draw to a close. Indeed, a quick search for “childcare crisis” will show you just how worried parents of young kids are and how strapped they are for affordable options.

If the Wonderschool-EarlyDay deal works out, we could see an increase in the supply of childcare services. That would be good both for Wonderschool’s business and for parents who need the help.