New Mexico’s homegrown technology companies have flown to new heights over the last five years, with double- and triple-digit expansion in revenue and employment reflected in this year’s Flying 40 list of fast-growing technology firms.
Companies included in the 2020 annual awards celebration – now in its 23rd year – collectively reported nearly $1.16 billion in revenue and 4,692 employees in 2019.
That’s double the $581 million in revenue those same companies generated in 2015, and a 63% jump in employment compared with the 2,871 jobs they provided five years ago, said Randy Wilson, chief financial officer of the Sandia Science and Technology Park Development Corp., a principal sponsor and organizer of the Flying 40 awards.
In fact, just in the one-year period from 2018 to 2019, Flying 40 awardees’ total revenue was up $185 million, or 19%, compared with the $974 million reported by companies on last year’s list of high-flying firms.
“The companies being honored this year brought in more than $1.1 billion in revenue and doubled in size from five years ago,” Wilson said. “These companies are really contributing to the vitality of our economy.”
Some businesses report spectacular growth. Data analytics firm RS21, which joined the Flying 40 for the first time this year, topped the list of companies with below $10 million in revenue after reporting a 7,659% leap in income from 2015, when that company first launched in Albuquerque.
“RS21 is an amazing story,” Wilson said. “It started with one employee and just $90,000, and over five years it grew to nearly 60 people and more than $7 million in revenue. It’s a remarkable success.”
For the second year in a row, engineering research and development firm Verus Research earned the top spot among firms with more than $10 million in revenue. That company grew by 519% since 2015, from $2.69 million to $16.64 million last year.
The Flying 40 awards, which launched in 1998, reflect three categories of companies: Top revenue-producing firms independent of their annual financial growth, top revenue-growth companies with more than $10 million in annual income, and fast-growing firms with between $1 million and $10 million in revenue.
Growth is measured over five years, from 2015-2019.
The awards aim to celebrate the success of the homegrown firms included on the annual list, while also drawing the state’s attention to the critical role New Mexico’s technology sector plays in diversifying the local economy, said SSTP Development Corp. chairman and CEO Sherman McCorkle. That’s particularly important this year, given the global pandemic’s immense impact on the oil and gas industry – traditionally the mainstay of the state economy.
“Every elected official, from the local to the state and federal levels, talks about the need to diversify New Mexico’s economy,” McCorkle said. “These technology companies are actually doing that. They need to be singled out and celebrated.”
Snapshot of diversity
The Flying 40 companies represent a broad range of industry activities, including engineering and information technology, aviation, aerospace and solar energy. Many provide services to a variety of state and federal agencies, and to commercial clients.
And most are homegrown firms, including recent startups and more mature companies that built their businesses from scratch in New Mexico. Many are marketing new technologies and services either originally developed in the state’s national laboratories and research universities or created through grassroots ingenuity.
The list provides only a small snapshot of the state’s technology sector. Nearly 3,400 technology companies operate in New Mexico, according to Cyberstates 2020, an annual state-by-state analysis of the U.S. technology industry published by the Computing Technology Industry Association. As of last December, those companies together accounted for $8.6 billion, or 9.7%, of New Mexico’s total gross state product. And they employed almost 68,000 people.
More work to be done
Still, New Mexico can do a lot more to grow the industry, McCorkle said.
“For economic diversification to be successful, it requires the attention and support of all our elected officials at every level of government,” McCorkle said. “That’s why, apart from being a celebration, we also use these awards as an appeal for more support for the entrepreneurial ecosystem in New Mexico.”
McCorkle, who has worked to promote local industry development for more than 30 years, said New Mexico has achieved a lot, but it can do more.
“I’ve seen too many programs come and go, and we need to sustain the ones that work,” McCorkle said. “Initial private startup investment is critical, and state government needs to support that and build it up. We need to expend as much in resources and effort to create homegrown technology-based companies as we do on recruiting companies from other states.”
More can also be done to tap into the technological prowess and wealth of resources concentrated in the state’s national laboratories, both to transfer more technology from lab to market and to forge deeper ties between the labs and the state’s research universities, McCorkle said.
Nevertheless, the Flying 40 provides an important annual indicator of what he have achieved so far, and an opportunity to celebrate that success.
The awards show everyone what’s possible, said Charles Rath, president and CEO of awardee RS21.
“It’s important to celebrate the success of New Mexico’s technology companies,” Rath said. “There’s a myth that great technology companies can only come from places like the Bay Area or New York City, and it’s not true. The Flying 40 shows there are many great companies right here in New Mexico that are shattering that idea.”