Jan 22 2014, 9:15am CST | by Forbes
Two years ago, when I first started working on this list as an intern, Eric Ethans and Annie Lawless were barely making rent, hawking homemade organic juice out of Igloo coolers and repurposed coconut water bottles. Today Suja is one of the fastest growing consumer product companies in the country, poised to do $50 million in sales in just its second full year of business.
What a difference 24 months makes.
Rocketship growth isn’t uncommon on our list of America’s Most Promising Companies, a ranking of high-growth, privately-held companies with under $250 million in annual revenue. In fact, it’s what we look for. But to watch a management team crack open a ripe new market and hang on for dear life as top line explodes is still good fun.
Take our No. 4 pick, Evolent Health. Backed by $130 million in growth capital, the company is moving quickly in the wake of the Affordable Care Act to help hospitals lower healthcare premiums by setting up their own insurance businesses. It’s an ambitious, complicated task. Run by former Advisory Board CEO Frank Williams, the company did $8.3 million in sales in 2012, its first full year of business. Last year: $40 million.
But it doesn’t always take tens of millions in capital, or expertise in a complex market, to fuel such growth. CardCash.com, for one, holds an unlikely slot in our top 25. The company runs an unremarkable-looking website out of East Windsor, N.J. that buys unwanted gift cards off consumers, then resells them to pocket the difference. It might buy a $100 iTunes giftcard for $70 for instance, then sell it for $95. After years of bootstrapping, the company took $6 million from Guggenheim Partners in November. But even before that capital infusion, CardCash was well on its way to triple-digit growth. Sales jumped from $17 million in 2012 to $56 million last year.
For some companies, it takes a bit more meandering. Yext, which helps brick-and-mortar businesses sync prosaic data like phone numbers, addresses, business hours and product offerings across 46 different websites–Facebook, Yelp and Yahoo! among them–needed five years and a $30 million spin-off to finally settle on a long term business model. Now sales are doubling each year.
Though we prize growth numbers on our Most Promising list, top line doesn’t say everything. We want sustainable growth, so we strive to take a holistic gauge of the companies that apply. Over the course of four months we reviewed hundreds of applications from businesses across the country. The final assessment is based on growth (both in sales and hiring), quality of management team and investors, margins, market size and key partnerships. Then we spoke to each company to make sure we didn’t miss anything.
Producing a ranking in the opaque world of privately-held companies is never easy. But we’re confident that many of these are the IPOs and billion-dollar acquisitions of tomorrow.
Source: Forbes Business
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