I'm not familiar with what "education institute backed" means. Does that mean GTech provided initial seed capital to the co-op for free? If so, how much money was it?

To the general question of why co-ops are not prominent, it's because the workers don't have significant money. By definition, the co-op is owned by the workers and therefore, the workers need to fund the business. That limit on investment is why co-ops are often smaller businesses like consultants sharing an office & a laser printer or farmers-&-market collective. I also made a previous comment about it: https://news.ycombinator.com/item?id=11165966