Pre-K-12 Education Companies’ Status Falls on 2016 Inc. 5000 List

Associate Editor

In 2016, the number of pre-K-12 education-focused companies notching a place on the Inc. 5000 list fell sharply from last year, as did the combined revenues of those businesses.

The list is meant to measure the fast-growing private companies across the U.S. economy. While education businesses continue to have a substantial place in the rankings,…

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In 2016, the number of pre-K-12 education-focused companies notching a place on the Inc. 5000 list fell sharply from last year, as did the combined revenues of those businesses.

The list is meant to measure the fast-growing private companies across the U.S. economy. While education businesses continue to have a substantial place in the rankings, their star fell somewhat. The fastest-growing private education companies over the past year serving schools and students from pre-kindergarten through 12th grade had combined annual revenues of $402.7 million, down from $617 million in 2015.

 The number of companies on the education-focused list declined, too—from 39 last year to 23 this year. (Note: We put one company: k12itc on our list, although it was called a “technology” company for Inc.’s purposes. And we took one company, Pluralsight, off of our list, because it doesn’t have a K-12 connection anymore.)  In 2014, there were 40 companies on our “pre-K-12” category of the Inc. 5000 list, which is compiled annually by Inc. magazine.”

The Inc. 5000 list measures the fastest-growing private companies that apply to Inc. magazine for the distinction. To be considered, a company had to submit its revenues and other information to establish its growth rate from 2012 to 2015. “Education” is one of the industries that is used as a category within the overall list of 5,000 companies.

Even though the number of companies has dwindled on our pre-K-12 list, in 2016 “education” was deemed the third-fastest-growing sector of the Inc. 5000 (at 194.7 percent) behind #1, energy at 227.4 percent and #2 media at 195.2 percent. That’s because the definition of “education” covers higher education and companies that train the adult workforce.

This year, six of the fastest-growth companies on the Inc. 5000 list centered on helping institutions of higher education with their recruiting, marketing, advertising, and enrollment. In fact, the #1 education business was Tribeca Marketing Group, which grew 8,395 percent to $8.6 million in three years on that mission (but didn’t make it on our list because of its postsecondary focus.)

The average company on the 2016 list achieved a three-year growth of 433 percent, and the Inc. 5000’s aggregate revenue is $200 billion, according to the publication. Eight companies on our education list exceeded that average.

The top company on our list is Youth Digital, a business that focuses on teaching children about coding and developing with technology, which grew 3,622 percent from 2012 to 2015, to total revenues of $5.3 million.

The largest company on the list is Curriculum Associates, with revenues of $110.7 million, which grew 187 percent in the same timeframe. The company designs research-based print and online instructional materials, screens and assessments, and offers data management tools for teachers and administrators. It was also on the list last year. (See the full 2016 list below.)

The 2016 Inc. 5000 list is based on companies’ percentage revenue growth from 2012 to 2015. To be on the list, a private company must reveal its annual revenues, so the list is just a snapshot of privately held education businesses willing to provide this often closely guarded information. Not all privately held companies in education pursue placement on the list.

Reversals for Some on the List

Last year’s top-ranked education company in PreK-12 was Capture Education, and it was removed from the 2015 and 2016 lists when the CEO at the time overstated results, according to Inc.

The magazine wrote a story about the reversal with “Company That Falsified Financial Documents Loses Its Inc 5000 Slot.”

“Inc. requires independent verification of all submissions to the Inc. 5000 through tax documentation,” wrote Inc. magazine spokesperson Drew Kerr in an email response to our inquiry about the company. “Capture Education submitted three years of tax documents, but as it turned out, those documents contained false information.”

A call placed to Capture Education was not returned on Thursday.

In fact, it’s been a rough year for the Inc. 5000 list, with its top company for the past two years—Fuhu, which made the nabi educational tablets—declaring bankruptcy and being acquired by Mattel in an asset sale. (Inc. chronicled the events leading to this fast-track reversal in its story, “Inside the Swift Rise—and Fall—of America’s One-Time Fastest Growing Company.”)

We wrote about Fuhu Inc. in 2013, at which time it was categorized as a consumer products company.  CEO-at-the-time Jim Mitchell said his El Segundo, Calif.-based company was selling the tablets loaded with educational software to schools in China, and planned to grow its business in the U.S. schools’ market, too. That never came to pass. But he saw more potential for fast growth outside the United States. His business grew more than 42,000 percent in three years.

Repeating on the List

In their earlier years, companies such as Microsoft, Dell, Domino’s Pizza, Pandora, Timberland, LinkedIn, and Yelp were among those named to the Inc. 5000, according to the publication

One of the more difficult things for a company to do is to appear year after year on the list, because fast growth can be hard to maintain. Of the 23 companies on the list, 14 have been on the list multiple times.

Three education-focused companies on our list have hit the “five-time” mark. They are:

  • Appleton, a Huntsville, Ala. company that provides public schools with talent management and workforce services, appeared on the list five times. Most recently, it has a three-year growth rate of 453 percent and total revenue of $22.9 million. (It was ranked #876 on the Inc. 5000, and #8 on the education list.)
  • C2 Education, a Duluth, Ga. company that provides supplemental education programs, had 2015 revenues of $58.4 million and a 159 percent three-year growth rate. (It was #2281 on the Inc. 500 list and #17 on the education list.)
  • School Tech Supply, a Simi Valley, Ca. company now known as STS Education that provides refurbished PCs and discounted classroom technology to educational institutions, grew 94 percent over three years and had 2015 revenues of $25.7 million. (It was #3439 on the Inc. 5000 list, and #23 on the education list.)

The Education Week Library assisted in compiling this report.


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