In life, in lists, it’s rough to do apples-to-apples comparisons. In culling our weekly lists of every business silo and subsilo, of firms of all ownership forms and makeups, we have several goals: to compile as comprehensive and accurate a roster as possible; to produce features on the best and the brazen; and to analyze beyond a comparison of numbers. As an editor wrote one sentence ago, “It’s very difficult to do apples-to-apples comparisons.”
But one can’t help but be struck by both the statistical anomaly of this year’s Business Journal list of the fastest-growing privately held firms and the kangaroo sales leap by the Class of 2017.
For trivia buffs, as with last year, we found exactly 157 small, medium and large private companies that met our main metric: at least 15% sales growth over the two years starting on June 30, 2015. Promise. Didn’t fix the total. Our Excel spreadsheet is infinite. Of course there are always a few companies we don’t uncover and a few that chose to stay undercover—please tell us if you know members of either group.
That said, this years’ group of cheetahs put on the afterburners, growing sales by 90% versus last year’s 66%, when the cover photo was a cheetah. The Class of 2017 grew jobs by 30% versus 38%.
Why the sales leap?
In a moment, some ideas.
Also, know the sprinters are ranked by percentage increase in sales.
Our research team, led by Dana Truong, also provides companies’ employment numbers, not our metric here but surely good to know.
By now you may know that I’m a fan of business maxims and precepts: “Follow the Money,” “Follow the Lawyers,” “Follow The Irvine Co. (in OC).” And—“Follow the Growers.”
We believe this list of fastest-growing private companies highlights our local businesses, industries, and niches of opportunity, for everyone from job seekers to vendors to investors.
The list begins on page 26, and some insights follow here.
Big Companies
We found 24 bigs—$100 million-plus revenue—that combined for about $17 million in sales, up 94%. Their payrolls swelled about 20%, a good number, and naturally smaller than smaller cheetahs.
The accounting of fastest growers starts with two that sprint off the page. We profiled No. 2, Allied Universal, in our Aug. 21 issue: nearly $5 billion in revenue, up 288% from two years earlier. Acquisitions powered the top line, but a focus on the right industry at the right time—security—was an equal piston.
Chief Executive Steve Jones told us last month: “Executives are thinking about keeping their people safe. That keeps CEOs up at night.”
As with many of the 157, Jones embraces technology. Coming soon: robots on patrol.
Peter J. Brennan’s profile of Andy Lee’s call center meteorite, Irvine-based Alorica, starts on page 1. As with Allied, No. 1 Alorica is fueling growth with acquisitions, the latest tech—software-as-a-service—and a market of opportunity.
The acquisitive nature of the Big As, Alorica and Allied, and the sheer size of their global operations—Alorica operates call centers in 19 time zones, and Allied employs over 150,000—are two big reasons that 66% grew to 90% this year. But the As didn’t grow the growth alone. The list is the OC Community of Business in brilliant relief: entrepreneurs and firms in the widest berth of businesses. And you’re likely seeing many for the first time.
A final thought on the As: A chunk of the high flyers are businesses built on the new new thing: data mining and analytics, artificial intelligence, fin-tech, stem cells, the cloud, etc. Grateful that so many of those firms were hatched and are accelerating here. Amusing that Alorica and Allied didn’t build a shiny new thing—they are simply building a better mousetrap out of an old business—at the right time.
We don’t always hew to list rankings for our breakout features, and we didn’t here. Mediha DiMartino and Chris Casacchia profile two other large revenue rocket ships, one an erstwhile rarity and one a modern-day unicorn. No. 5, Rauxa, page 18, doubled sales just this year, organically. That’s rare. It’s also the largest female-owned advertising/marketing agency in the U.S. Casacchia updates us on serial entrepreneur James Downey’s latest high-flyer, No. 13, the EnCore Group, page 16. The plane parts maker is a manufacturer. Here! It grew sales 43%, and that number could take off with regulatory OKs on pending deals with three large carriers.
And…
• Passco Cos. in Irvine is No. 4 with about 121% growth, $684 million in sales. Impressive for any firm, more so in that Bill Passo started buying commercial real estate 41 years ago. “Just a high-energy person,” the philosophy major told me this summer. “Always have been. As long as I can add value to my company …” Passo’s idol is Gen. William Lyon, 94, of William Lyon Homes.
• New American Funding in Tustin is No. 6. Sixty percent growth at Rick and Patty Arvielo’s mortgage lender and testament to OC’s resurgent private mortgage-lending sector—four of the U.S. top 25.
Midsize and Small
The list of midsize and small companies, mids with revenues between $10 million to $99.9 million, smalls under $10 million, starts on pages 30 and 42, respectively. The 133 companies combined for $2.6 billion in revenue, up about 66%, with 7,397 local jobs, up about 50%.
• Plutos Sama LLC topped the middies. The Irvine-based holding company owns an esoteric group of companies, mostly real estate-related, but the latest portfolio add is a firm that helps oil and gas explorers all over the globe. This much is decipherable: The portfolio is performing. Sales are up 956% to $46.3 million, 300% spike in hiring, 20 to 80.
• Pedego Electric Bikes is No. 29. We cite the U.S. No. 1 in e-bike sales for bucking and building on trends. Pedego is essentially an e-bike retailer in bricks-and mortar stores, and owners DiCostanzo and Shelly, like Downey, like many other owners on the list, are serial entrepreneurs. The “boys” say they’ll hit $20 million in year-over-year sales in January. The secret: Its store owners started out as bike owners. “The more stores we open, the more stores we open,” Sherry said. The boys feel “they built a moat.” We’ll see. Yamaha Motor Corp. in Cypress is the latest big to announce it’s entering the once-maligned “fake bike” industry.
• CMD Construction Inc. is No. 1 with a bullet among small firms: Sales are up seven-fold as employment tripled in the hot OC space of tenant-improvement contractors.
• Leaf Communication Consulting LLC in San Clemente is No. 3. Last year it was No. 2 at $4.8 million, up about 835%. It’s hardly a slump. The consulting firm founded in 2013 designs and builds wireless infrastructure systems. Two-year revenue growth “fell” this year to 440% as sales merely doubled to $9.6 million. Dan Leaf’s company was also the recipient of the Business Journal’s Family-Owned Business Award in the small-company category this year.
Private Part
I gave props to Research Director Dana Truong up top. She’s beyond diligent, trust me here. Also this week’s list is like a few others exclusively made up of private companies. OC, as we all know, has an inordinate amount of private companies of all sizes, especially large ones, topped by the largest real estate company in the country. Here’s our appreciation to the 157 private cheetahs for assisting Team Truong in their compilation of data.
Finally, I just had lunch with the owners of a fast-growing midsize company who were in the process of taking in an investor—still private but adding a partner.
When I asked how that was going, they replied that “the auditors have been here for two months—we’re ready for them to go. That’s time away from growing the business.”
You’ll note that the Pedego Boys are smiling in the picture. The joys of privacy and a growing concern.
