Silicon Valley continues to dominate the innovation hot spots in North America, according to the latest 2016 Technology Fast 500 annual ranking of the fastest growing North American companies in the technology, media, telecommunications, life sciences and energy tech sectors.
The region had 20 percent of the companies on the list, with 63 percent of those in the software industry. The New York Metro area and the Greater Los Angeles area came in next, with 17 and 8 percent respectively of companies on the list in software and digital content, and the media and entertainment sectors. Rounding out the top five markets, the District of Columbia dominated in software and New England in software and biotech.
Awardees in this list are selected based on percentage fiscal year revenue growth from 2012 to 2015. Overall, 2016 Technology Fast 500 companies achieved revenue growth ranging from 121 percent to 66,661 percent in the 2012 to 2015 time frame, with a median growth of 290 percent.
“Our personal and professional lives are shifting in response to new technologies and business models that are changing the way we work and live,” said Sandra Shirai, principal, Deloitte Consulting LLP and US technology, media and telecommunications leader. “The 2016 Technology Fast 500 winners are supporting this shift by creating experiences for their customers, surpassing expected possibilities and helping to envision even more effective and ingenious solutions.”
Software continues to have the greatest impact across technology sectors, representing 58 percent of the entire list and five of the top 10 winners overall. Of the private companies, 44 percent identified themselves in software as a service (SaaS), 24 percent in enterprise software and 10 percent in security. Since the creation of the ranking, each year software companies have made up the majority of winners, with a median growth rate of 275 percent this year.
Furthermore, biotechnology/pharmaceutical companies make up the second most prevalent sector in this year’s rankings, comprising 13 percent of the Technology Fast 500. Digital content, media and entertainment companies follow next with 12 percent of companies representing this year’s list and a median growth rate of 544 percent.
In the 2016 rankings, 68 percent of the companies were backed by venture capitalists at some point in their company history. Notably, eight of the top 10 companies on the Technology Fast 500 received venture funding.
“Investors continue to remain confident in North American technology companies. Companies that enhance efficiencies through new technologies, enter new markets, and develop new products and business models are the ones who sustain fundraising and will provide a significant return on investment. These are the rising stars,” said Jim Atwell, partner, Deloitte & Touche LLP, and national managing partner of the emerging growth company practice. “The industry understands that while innovation entails taking risks, the absence of innovation is riskier. This is something the Technology Fast 500 winners recognize as they continue to grow and move their companies forward.”
To read the full list of the Deloitte North America 2016 Technology Fast 500, click here.
[Top image: San Francisco Center for Economic Development]