Last month I attended a rooftop event in London hosted by Edspace.io, where a cross-section of European edtech startups and VCs gathered to discuss the latest innovations in education. The talent, energy and enthusiasm of those in attendance was palpable – a sign of the growing confidence within Europe’s edtech sector, a market holding immense potential for companies looking to make a global impact.

Indeed, Europe is the second largest worldwide market when it comes to education spending, totalling over €700bn each year for its 110 million students. The pedigree of its countries’ education systems is world class, with relative minnows such as Estonia, Ireland and Finland consistently riding high in the OECD’s PISA rankings.

Yet, despite 3,000 edtech companies currently active across the continent, they receive just 8% of worldwide investment in the sector. Instead, the US and China dominate, with more than 58% of all edtech funding in 2017 going to US companies and 19% to China. It’s no surprise, then, that the members of edtech’s unicorn club – those with valuations worth more than $1 billion – are either Chinese (such as Hujiang or iTutorGroup) or American (such as Coursera or Udemy). India’s Byju’s is the sole exception.

Can Europe add a name to this list and stand alongside its other tech titans such as Sweden’s Spotify or Germany’s Zalando? Sceptics will argue that lack of access to funding and a fragmented market of 44 countries – many with complex school procurement processes – will hold it back. I take a more positive view. For example, from 2014 to 2017, investment in European edtech start-ups more than tripled in size, from €140mn to €490mn. Yet transactions per year have remained broadly consistent, meaning that investors are devoting more significant sums, in more mature projects. While €490mn represents but a third of the venture funding invested in US edtech last year, just four years ago it was a tenth. Clearly, the historical reluctance of investors to back European edtech companies is abating.

UK stands tall

Attracting 35% of this €490mn figure, the UK stands tall as the main player on the European edtech stage. Of course, Brexit uncertainty poses challenges – particularly to the workforce in the UK tech industry – yet the country has some natural advantages. At the top level, the government is engaged, establishing a national computing curriculum and recently calling on tech companies to help revolutionise the education sector, identifying five key areas of focus. The UK is also home to a host of world-class universities and publishers that can act as key local partners and collaborators for entrepreneurs. And, with its influential Tech City community, London is unparalleled in Europe as a launch pad for edtech start-ups, ranking as a global top five edtech hub.

Other European cities are also rapidly establishing themselves. Paris, for example, is developing into one of the most dynamic edtech ecosystems in Europe. The edtech Observatory, which comprehensively lists French edtech players and researches major trends in the industry, was recently established in the city, as was the EdTech France association. Two venture capital funds dedicated exclusively to edtech investment – Brighteye Ventures and EduCapital – were also recently launched in Paris, closing almost €100mn between them.

Take Helsinki, too. Finland’s education system has created a world-class “’ade in Finland’ brand, with Finnish edtech companies developing best-in-class products that are highly regarded for their quality and innovation, particularly in gamification. Importantly, edtech start-ups in the city have access to one of Europe’s leading edtech start-up accelerators, xEdu. While the US leads the field with more than a dozen such structures dedicated to edtech, Emerge in the UK and LearnSpace in France are examples showing Europe is heading in the right direction.

Europe’s natural advantage

Assuming a European startup achieves success at home, scaling up to become a unicorn requires international expansion. This is where European edtech companies have a natural advantage: its diversity and deep historical links to the rest of the world give it a uniquely international outlook. While Chinese and US startups understandably tend to focus on their large domestic markets before taking products overseas, European companies have an incentive to capture the considerable opportunities overseas.

There are huge markets in the developing world with young, growing populations clamouring for edtech – India, for example, has 300 million children aged 6 to 17. This is where European companies can step in.

A European edtech company that has successfully implemented its product or service across European countries, with different barriers to entry, has proven staying power; if you make it in Europe, the door to the rest of the world swings open. The worldwide popularity of European curricula – such as the International Baccalaureate and iGCSE – further serves to help internationalise European edtech startups. So, too, the similarities of foreign countries’ educational systems to those in Europe, with the UK and Commonwealth a prime example.

Let us not forget the cultural richness and variety of lifestyles on offer in Europe’s major tech hubs, from the uber-cool Berlin startup scene to the more relaxed Barcelona. The continent is a melting pot of different cultures, languages, and ideas like no other, where budding entrepreneurs from all over the world flock to make their big break. Indeed, with President Trump’s H1-B visa program crackdown, and with many European countries creating startup visa programs making it easier to hire foreign talent, Europe is ideally positioned to continue attracting the brightest tech talent.

Over the longer term, if Europe can play to its natural strengths, it could nurture the next generation of start-ups and help edtech truly come of age.

Vikas Pota is Group Chief Executive of Tmrw Digital