Chicago gets some shine on Inc. 5000 list of fast-growing companies
Chicago holds 95 spots on the Inc. 5000 released Wednesday, second only to New York this year on the volatile list of America's fastest-growing private companies.
Protein Bar, AKTA and Insureon were among nine Chicago companies cracking the top 500, all for the first time.
The city's 95 companies of the 5000 placed it a distant second to New York’s 205 but ahead of startup hubs such as Austin, Texas (fourth with 87) and San Francisco (seventh with 63), according to Inc.
Chicago moved up from fourth last year, jumping over Los Angeles and Washington D.C., neither of which cracked this year’s top 10.
“Chicago has always had a pretty strong presence on the list,” said Inc. editor Jim Ledbetter. “But the fact that (its presence) is 50 percent larger than San Francisco is pretty striking. It continues to be an innovative place that is obviously pretty friendly to startups.”
Howard Tullman, CEO of Chicago’s 1871 tech incubator and an Inc. contributor, said he expects some sort of celebration in September for the Chicago winners, likely at the Merchandise Mart-based facility.
Tullman said it doesn’t surprise him that Chicago did well on this list, since the growth metric favors companies generating revenue, which he said plays into Chicago’s typical business-to-business startup profile. The Inc. list measures revenue growth over a three-year-period, requiring firms to submit financial records, the company said.
“We’re just never going to be a place that goes for moon-shot businesses,” Tullman said. “We’re B2B, real businesses doing real innovation. That makes for steady growth with the metrics they (Inc.) use.”
This year’s list features a repeat No. 1 company for only the second time in its 33-year history. California-based Fuhu, a manufacturer of computer tablets for children, has charted revenue growth of 158,957 percent over the past three years, according to the list. Its growth rate last year was a mere 42,148 percent.
Because growth rather than size is the key metric, the list changes significantly from year to year and features spectacular growth numbers, Ledbetter said. Such growth rates are not typically sustainable. This year’s top 500 includes only 93 companies that were on the list last year and features growth rates ranging from 942 percent at the bottom to Fuhu’s staggering rate at the top, he said.
MAX Digital, which makes digital marketing tools for the auto industry, leads Chicago companies on the list. Founded in 2010, it generated about $100,000 in revenue that year, compared with $6.5 million in 2013. That’s a growth rate of 5,483 percent — 51st on the list.
MAX Digital CEO Pat Ryan said he’s especially proud that his company ranks third on the list among software companies, which he said California firms tend to dominate. Both software companies ahead of MAX Digital are California-based.
The top 500 includes nine Chicago companies, all of which appear on the list for the first time. The eight others are:
- Insureon (No. 107), which provides insurance coverage for small businesses;
- Paramount Lodging Advisors (No. 188), a hotel-industry real estate services company;
- Protein Bar (No. 200), which operates a chain of healthy-food/fast-casual restaurants;
- Restaurantware (No. 366), maker of disposable tableware for the hotel, catering and restaurant businesses;
- AKTA (No. 414), a mobile app developer and innovation and user-experience consultant;
- Response Team 1 (No. 422),
an emergency recovery company;
- RIPT Apparel (No. 441), a T-shirt maker that sells limited-edition artist-designed shirts;
- Framework Communications (No. 442), a single-source provider of telecommunications, IT, voice/data systems and IT management support.
“I’ve wanted to make this list since we started,” said RIPT Apparel CEO Matt Ingleby, who launched the company in 2009 with two childhood friends, co-founders Paul Friemel and TJ Mapes. “I’m very proud of our team, and everyone that’s helped us along the way.”
Rich Rinella, COO and co-founder of Restaurantware, said his company is poised for continued growth.
“The market is massive compared to where we are now,” he said.
This year’s top 10 cities by number of companies on the list are New York (205), Chicago (95), Atlanta (94), Austin, Texas (87), San Diego (81), Houston (76), San Francisco (63), Dallas (55), Denver (47) and Irvine, Texas (47).