Healthcare joins the top tier of high-growth businesses in the Americas

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Covid-19 was threatening to become an extinction-level event for many growing small businesses. Governments rushed to provide support and businesses in many sectors had to find new ways to operate.

But for those resilient enough to withstand the immediate hit to the economy – and seize new market opportunities created by the pandemic – it has proven to be a surprisingly fruitful time.

It was also a time of large-scale new business creation, as many workers chose to quit their jobs and start something new – a surge of entrepreneurship that may have laid the foundations for an even larger generation of fast-growing companies.

This third annual ranking of the Americas’ fastest growing companies reflects the impact on some of the region’s most promising new businesses in the first year of the pandemic. The FT list was compiled with Statista, a research company, and ranks entrants across the Americas based on their compound annual growth rate (CAGR) in revenue, between 2017 and 2020.

Unsurprisingly, as digital has taken over the physical for many businesses, the tech sector has led the way. Tech companies made up 28% of this year’s list. But many others officially listed as belonging to other sectors, from retail to finance, have also relied heavily on a digital business model – a reflection of how technology has spread through the economy. .

Digital businesses also have the advantage of being free from some of the constraints that limit the pace of growth of other businesses, says Ben Narasin, founder of Tenacity Venture Capital, an early-stage investment firm in Silicon Valley. A digital business challenging traditional banking, for example, doesn’t have to go through the slow and costly process of opening hundreds of branches or staffing them.

“Any digital business has the ability to grow at a rate that no physical business can,” says Narasin.

While tech names feature prominently on this year’s list, pharmaceutical and healthcare companies have been among the fastest to scale. Half of the top 10 companies on the list were involved in these sectors.

The potential for successful new treatments or devices to garner huge sales after gaining regulatory approval explains these companies’ rapid spurts of growth, almost from a standing start.

Axonics, which tops the list, has seen its revenue skyrocket from next to nothing in 2017 to over $100 million in 2020 as its new device for controlling overactive bladder and bowel problems found a ready market.

However, the sustainability of such growth often depends heavily on the nature of the commercial partnerships concluded in the pharmaceutical world. Blueprint Medicines’ revenue, for example, has grown from $21 million in 2017 to nearly $800 million in 2020 thanks to the success of new cancer treatments. But the surge was short-lived. The following year, sales fell by more than 75% as marketing passed to partner Roche, who assumed responsibility for the product under an earlier collaboration agreement between the companies.

Other pharmaceutical companies to ride the wave of a major product launch include Moderna, one of several to develop a successful Covid-19 vaccine. However, this ranking covers the period before Moderna’s vaccine went on sale. The following year, the company’s revenue increased more than 20 times to $18 billion.

Yet the latest list, which covers the three years to the end of 2020, captures the huge jump in digital activity in the early months of the pandemic, as people around the world were forced to work, shop and play online.

Firms that have come to symbolize the Covid-19 tech boom feature prominently. Among companies with more than $1 billion in revenue in 2020, Zoom Communications saw the highest growth rate, thanks to massive adoption of its video conferencing service during the first months of the crisis. . Shopify, whose e-commerce platform has become the home base for a wide range of retailers looking to move online, offered a lifeline when customers were trapped at home.

Most investors think this kind of growth was unique: Shopify shares have fallen more than 60% from their pandemic high, while Zoom shares have fallen 80%. But the two companies have weathered the crisis to establish themselves as new leaders in their categories.

Among technology companies, those involved in software dominated the rankings. With a distribution model that makes it possible to reach vast new markets almost instantly, cloud-based software, also known as software as a service, or SaaS, was well positioned to benefit.

The crisis has forced many companies to build instant digital infrastructure to support their new remote employees, transforming part of their operations overnight and fueling the rapid growth of infrastructure software vendors. They include DocuSign, whose service enables remote contract enforcement, and Okta, an identity service that makes it easier for users to move between different applications without having to log in multiple times.

Meanwhile, e-commerce, social media and streaming services have come to play a much bigger role in the lives of their users. Revenues for MercadoLibre, the Argentinian online marketplace, soared to nearly $4 billion, making it one of Latin America’s fastest-growing businesses, while furniture retailer Wayfair and the Etsy craft seller have surged in the United States.

New businesses involved in digital financial services also continued to figure prominently among the fastest growing businesses in Latin America, reflecting the relative absence of a developed financial services industry in the region. But, even in the most developed American market, fintech has exploded.

The big profit margins of many incumbents in the financial world have made their markets an attractive target for start-ups, says Narasin.

Echoing Amazon founder Jeff Bezos’ famous warning to established businesses that “your margin is my opportunity,” Narasin adds, “Fintech companies are attacking this like crazy.”

A notable feature of this year’s list is that it’s not just the smallest companies that have experienced meteoric expansion. Large-scale growth has been a feature of the tech boom of recent years, a phenomenon that has been supercharged during the pandemic.

Tesla’s annual revenue grew by $20 billion in the three years covered by the list, cementing its place as the first new auto company in decades to achieve mass-market scale. But even that pales in comparison to Amazon, whose revenue jumped more than $200 billion over the same period — that’s more than all of the other 499 companies’ revenue combined in 2020.

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