Challenger Universities pt. 1: Does higher education’s $2tn+ global market have space for something new?

Mario Barosevcic
Emerge Edtech Insights
5 min readMar 25, 2020


This Emerge article series, researched in collaboration with our extensive network of education leaders, offers insights and practical advice for founders and university leaders bold enough to create new universities.

Many existing universities will continue to be important pillars of society but there are ripe opportunities for a new generation of highly innovative entrants to play a key role in taking higher education to the next level.

There are very few industries in the world like higher education (HE). It has a steady inflow of up to 50 million customers each year, an active base of 200m customers and estimated revenues of $2tn (source). It is a huge and resilient market. It has been counter-cyclical to recessions and while there will be some short term wobbles during the Covid-19 period, the majority of the industry is likely to eventually weather the storm. In parallel, HE is expecting an additional 200m new active customers in the next 10 years.

On the surface, student satisfaction is still high. But drop-out rates are high too and in many places students are unhappy with the amount of support they receive and the integration of technology in their education. They are increasingly questioning the purpose of traditional higher education. Our conversations and research suggest there are students who are ready and interested in something new. In an incredible twist of recent events, technology is now at the forefront of teaching and being put to the test. While universities will learn a lot and some technology players will gain in popularity, it is unlikely that, once things eventually go back to normal, the status quote experience will drastically change.

Over the last 5 years, we have spoken to hundreds of innovative university leaders and startup founders, and one theme is consistent, too. There is a strong desire to improve, innovate, scale and take HE to another level, with an emphasis on better student experiences and life outcomes. In the UK this has been particularly pronounced given shifts in education costs towards students, leading to higher student expectations and greater emphasis on ‘value for money’, often judged by employment outcomes. However, while there have been some improvements in HE among the top innovative universities, only a handful have been able to radically redesign the core student experience.

In this Emerge article series we ask ourselves — is it time for a new wave of institutions and offerings to emerge alongside the incumbents and successfully attract groups within the next generations of students? Are these insurgents the answer to the extra 200m graduate places needed by 2030? Will they bridge the gap between HE and more meaningful employment and access to work for graduates? Below is just a snapshot of some of the newer both existing and aspiring challenger universities that would argue that there is space for something new.

We define ‘challenger universities’ as full-term, in most cases degree-awarding or aspiring, institutions that have emerged from scratch or fully reinvented themselves in the last couple of decades. They offer a holistic learning experience driven by in-house innovation centred around at least one key innovation and focus area that distinguishes them from traditional organisations.

At Emerge, while we invest in and support founders across a range of education categories from vocational training to corporate re-skilling, we believe that universities in various shapes and forms, bundled or unbundled, are and will remain important centres of gravity for progress of society. And while many of the incumbents are here to stay, we believe there is increasing space for new, innovative and targeted institutions or offshoots of existing players to successfully occupy specific territories and gaps within the HE space.

We decided to write this series to serve as inspiration, advice and guidance for new university founders as well as existing university leaders and innovators on pathways of reinventing themselves.

In the first part of the series, thanks to the insights from our network of some of the best-regarded entrepreneurial HE thought leaders, we dive into the current state of and opportunities in HE. We take a look at the rise and resilience of HE and shed light on the long tail of struggling universities, the slow evolution of the existing university experience and lack of diversification in the current market. We dig more into the opportunities and case for innovation that we see opening a gap for challengers to fill.

Universities with no campus. Institutions with no faculty. Fully online enriching social experiences. Programmes with no courses or majors. Learning experiences with no textbooks. Meaningful employment as a default, not exception. Student oriented and co-created experiences. Pedagogically grounded, agile curricula. This is how the gaps are being filled and what the future is starting to bring.

In the second part of the series that will follow shortly, we provide an overview of the challenger university space, insights and learnings from the pioneers that are changing HE, our views on what challenger universities should embody and a blueprint on how to start your own university while effectively identifying and mitigating key risks.

Stay tuned for a new article in the series every week. Next week we share a brief overview of the rise and resilience of the university establishment, contrasted by some of the challenges we see in the HE space that create space for innovation.

While starting a new university is probably one of the most difficult and likely to fail ideas that you can have, it is such crazy ideas that excite us at Emerge. If you are a daring founder in this space or a university leader on the path to improving or reinventing the core student experience, we would love to talk and see how we can help:



Mario Barosevcic
Emerge Edtech Insights

Principal at Emerge Education. Investing in and writing about the future of education, skills and work.