If the economy is any indicator of what’s to come in the next few years, things aren’t looking too good for most startups. Yet, against the odds, 500 tech startups have seen positive growth over the last few years, and are projected to continue growing, according to Lead411’s Technology 500 list.
The Technology 500 recognizes the fastest-growing tech companies based on the percentage by which their revenues grew from the year 2007 to the year 2009. “It can be difficult to get startups to share revenue details,” says Tom Blue, founder of Lead411 and the Technology 500, “since most venture funded companies are reluctant to make these numbers public.”
In fact, Blue found some companies unwilling to even have their profiles listed on the Technology 500, out of fear of that releasing their numbers might benefit their competition.
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Still, if the Technology 500 is a true indicator, the technology sector may be what pulls us out of this economic slump.
Leading the pack: Pontiflex
Pontiflex Inc, the industry’s leading e-mail and social acquisition platform, topped the list, thanks in part to its revenue growth, which reached $6 million in 2009, and is projected to hit $15 million in 2010. Pontiflex has helped brands like UNICEF, Snapfish and Huggies effectively reach their audience through creative, opt-in advertisements.
With so many people being turned off by Internet advertising, Pontiflex has perfected the formula by offering publishers signup ads on multiple platforms. Because these ads are opt-in, people are more likely to engage with them via websites, social networking and mobile apps.
“The Pontiflex signup ad platform is a game changer for the industry,” said Zephrin Lasker, CEO & Co-founder, Pontiflex, “Because signup ads eliminate the click-through traditionally found in online advertising, publishers can keep people on their website or within their mobile app. Most importantly, people can opt-in to advertiser offers in a way that is completely respectful of their privacy.”
Breaking down the list
Industries represented on the Technology 500 list included mobile, consulting, Internet marketing, telecom and hardware. The software industry showed the largest revenue in total out of all industries on the list, at $4,138.4 million.
Both small and large tech companies made the list. While large companies like Newegg, with its $2.3 billion revenue, made an appearance on the list, the up-and-comers like Pontiflex, Bookrenter and Scale Computing were recognized for reaching the $5 million mark within two years. It’s these smaller, fast growing companies that will help boost the economy, believes Blue.
“We were pleased to see such a nice mix of industries on the list,” said Blue, “There are several innovative companies I expect to be well-known names in a matter of years.”
Geographically, the list was spread throughout the U.S. Atlanta had the most companies with large revenue increases, while the companies from Delaware represented the largest average growth. Surprisingly, said Blue, the San Francisco Bay area didn’t dominate the startups that made the list; only 10-15% of the top 500 companies came from the Bay area.
Industries on the rise
Despite an unsteady housing market and varying unemployment rate nationwide, the companies on the Technology 500 list have proven that it is possible to thrive in a shaky economy. Some industries may be experiencing growth while others are on a decline. Here are the trends shown in the Technology 500:
1. Mobile will be around a while. While these days everyone, even Grandma, has a mobile app, it appears that mobile is more than just a trend. Companies like PointAbout are both custom designing and offering DIY services to businesses and organizations who want to get on the mobile app bandwagon. As more connected devices offer applications, like smart tvs, phones and bluray players, there is a greater need for diverse apps.
2. Advertising is getting smarter. Pontiflex’s position at the top of the list proves that advertisers are getting wiser to the fact that consumers don’t want to be pushed with unwanted messaging. What we do want is relevant content that we have the option to engage with, and the smart ad companies are meeting this need. By creating ads that consumers can interact with, companies like Spongecell are achieving high clickthrough rates and high client satisfaction.
3. Being green is profitable. While it’s great to have an altruistic motive in running a green company, it helps if you can turn a profit like Gazelle. By offering innovative solutions and services that keep our Earth running a little bit longer, these companies can sustain business during any recession. Consumers, too, buy into the green thing, and are spending more dollars on eco-friendly, organic and natural products and solutions.
More on Technology 500
The goal of the Technology 500 was to build the most comprehensive list of fastest growing private technology companies by revenue, according to Blue: “It can feel like you’re in a bubble when you’re in the startup world; you never know where your company is compared to others, so we wanted to highlight those companies who had gotten the success formula down. We knew this would be of interest to our clients, and it would also help promote the companies on this list.”
The benefit to the participating companies is getting a virtual trophy to add to their collection, which may impress investors and clients alike. Investors can see who’s doing the best in a given industry simply by browsing the list. And competitors can get an idea of the market potential in an industry.
Blue says the response was so overwhelming that he plans to continue the Technology 500 in the future. He hopes to see more unique tech startups in 2011.
Here are the top 50 finalists of the Technology 500:
1. Pontiflex, Inc.
2. Scale Computing
3. Collections Marketing Center (CMC)
4. accesso, LLC
5. Pliant Technology, Inc.
7. Charter Auction LLC
8. WorkSpace Communications
9. Pendo Systems Inc.
16. WorthPoint Corporation
18. 365 Hangers
19. Evangelyze Communications
20. PerformLine, Inc
24. QStart Labs, LLC
25. Zilker Ventures
27. Zantech IT Services, Inc.
31. Music Networx AG
32. PayCommerce Inc
33. Safety Issues Publications, Inc.
34. INTELLIREX LLC
36. Polarion Software
38. Sourcebits, Inc.
40. The Nerdery
41. NextDocs Corporation
43. Lead Research Group
44. WaveMaker Software
45. SingleHop, Inc
48. Frayman Group
50. Rimini Street