For an Edupreneur, running the next billion dollar tech venture sounds like utopian, doesn’t it? To understand the context, let's look at some of the high level facts, with a focus on my own home market -- India.

First, Global size of the education sector is $5.4 trillion (6.9% of global economy) in 2015 as per estimates by World Bank and IBIS Capital.

Second, venture capital is pumping into edtech. Of the $86 billion aggregate VC deal value globally, education sector attracted $1.9 B (2.2% of total deal value) in 2014 as per estimates by Preqin and CB Insights.

Third, unicorns are aplenty. There are 107 unicorns -- that is, startups with value over $1 B -- globally since August 2015 as per Wall Street Journal.

Fourth, Edtech unicorns are rare. The only education unicorn is US-based PluralSight, which offers a variety of video training courses for software developers, IT administrators, and creative professionals. Started in 2004 and pivoted in 2007, the firm hardly qualifies as a startup

Fifth, India is a ripe education opportunity. There are 7 unicorns in India as of August 2015:  Flipkart, Snapdeal, Ola, InMobi, PayTm, Quikr, and Zomato. None of them are addressing the education sector. The most known listed entity in the for-profit Indian education space is Educomp, which at the time of writing had a market value of INR 180 CR (US $30 M).

Are EdTech Unicorns a Fantasy or Opportunity?

To begin answering this question, this piece is divided into three parts.

First, we look at the challenges faced by edupreneurs in tapping a market that is brimming with opportunities. Next, we track the macro trends that will shape the sector over the next 15 years. Finally, we zoom into possible areas of opportunities that will see the emergence of an education unicorn.

EdTech's Barriers to Entry

Why is it that education sector, despite its size and lethargy, has not seen a disruptive startup come along as a knight in shining armor? There seem to be 3 major structural factors that are holding it back:

The Not-for-Profit Club

Like healthcare, the majority of the edtech space is run by not-for-profits. It's not that these businesses are unprofitable -- and in fact, in India they typically generate more revenues that some for-profit sectors. Ask India's parent, who often shell out a large portion of their annual house budget to send their kids to school. The issue lies not in non-profits, but in the way non-profits often use this label to abuse and put down startups attempting to break into the edtech space with a focus on profitability for organic growth. Although examples exist of startups that have challenged the system, no one has been able to yet do it at scale.

The Clique Mentality

Imagine customers lining up outside of your office, and once they arrive, they stay with your business for another 10 years! Sounds like every entrepreneur’s dream. Education is one such space (if you know of others, please do write it in the comments). With such power in their hands, traditional educational institutions know that they are the gatekeepers. They act like a clique: a small close-knit group of people who do not readily allow others to join them. So trust building, which directly impacts lead generation, is a long-term game that most startups have been unable to play till date.

India's Concurrent Items

Education is a part of 52 items in the concurrent list to the constitution of India. Items in the concurrent list are a shared responsibility of the central and state governments. Over the last 68 years, this has resulted in a lack of cohesive effort to bring reform to this space. While most developed countries have a single unifying policy, India has been unable to have bipartisan approval on educational reforms. The politico-edu nexus has provided enough personal incentive for policy makers to not pursue meaningful changes. If a startup wants to scale nationally, they have to contend with differing rules and regulations that become a web whose spider is the incumbent institution.

EdTech Trends and Infrastructure

But all is not lost. These impregnable structural factors are seeing cracks due to 3 mega trends that are reshaping the sector:

The Emergence of the Mobile Generation

To scale an education startup 15 years ago, one needed deep pockets and right connections. With the advent of mobile computing, a billion of India's citizens are connected and, today, all you need the ability to identify a the relevant pain point and the right technical solution. While this might be an oversimplification, no one can deny that the possibilities that exist today were unthinkable some years ago. Leveraging mobile, startups are able to completely bypass the existing labyrinth to directly offer valuable education services to customers who are willing to pay.

Focus on eGovernance

Launch of initiatives like Digital India and Skill India along with enabling infrastructure such as MyGov have brought a new level of transparency to the entire policy system. This will give more  and impetus to the edupreneurs in shaping government policies in the space. After almost 3 decades, India has seen a majority government that has come to power on the promise of good governance. This is a clear sign to all parties and bureaucrats that unless they deliver, they will not be able to assume power. Hopefully the transparency in government functioning will redefine the power dynamics in the education sector for the better.

Investors with Deep Pockets

The earlier two factors along with the inherent lucrativeness of the sector has attracted many deep pocketed investors. From the likes of home grown investors like Ronnie Screwvala, Mohandas Pai, and Zishan Hayath to international investors like Bill & Melinda Gates foundation, money is available to startups for standing their ground and building a long-term business. The fact that most of these investors are themselves entering the space with UpGrad and Toppr is a further validation that the timing is right for a change.

The Biggest Opportunity in EdTech

Now this leads to the most interesting and debatable question: where will the next education unicorn emerge? 

The most likely ingredients of an education unicorn will be mobile-first, tech-core, crowdsourced content, employability-linkage, and a young team. 

Likely themes for India will include e-universities, early childhood, teacher training, in-home education, and rural to urban migration.

As per popular culture, unicorns are suppose to be rarest of the rare. Then to have 107 unicorns feels a bit like a joke. But if there was to emerge a disruptive edupreneur that was able to scale their startup, we will truly have something unique: a unicorn in the true sense of the words, and in an industry providing a truly valuable, impactful service. Like what Flipkart was able to do for Indian eCommerce, this edupreuenur will pave the way for others to follow. The true winner of this race will be the parents and children who are waiting for their white knight. Will you answer the call?

Let us know where else you see opportunities and barriers to creating education technology and business!