Congratulations to the Inc. 5000 Software (and AI) Superstars

If you’re reading the full list of 5,000 companies, it won’t take long to spot a software leader. Scottsdale, Arizona-based Lessen, which offers a property-maintenance software platform for commercial and residential customers, claimed the number two spot on the overall list for its incredible three-year growth rate: 45,603 percent. The company also recently announced the launch of its first generative artificial intelligence (genAI) tool, Lessen Copilot, which allows customers to manage their workflow through a conversational interface.

A first-mover advantage was core to Lessen’s early success, according to Jay McKee, the company’s founder and CEO. But there are more new entrants every year, which keeps the Lessen team on their toes. “The building repairs market is a $1.5-trillion opportunity, so new players coming in is not surprising,” McKee shared with us. “But we don’t really pay a ton of attention to the new competitors. We just try to hyper focus on getting better at serving customer needs.”

Closely focusing on and supporting customer needs is core to the success of FinMkt, which creates embedded lending and payments technology and reported a 752 percent three-year growth rate, particularly when it has come to acquiring enterprise customers. 

“FinMkt has always been a company focused on execution,” said the company’s co-founder and CEO, Luan Cox. “We have the benefit of having experienced and passionate leaders on our team, which has allowed us to attract a blue-chip client base who can’t afford to bet on a company that doesn’t know how to provide enterprise-quality technology and service.”

AI: It’s more than just hype

As software investors, we’re naturally very enthusiastic about AI advancement. AI–especially generative AI–has the potential to turbocharge effectiveness, efficiency, and productivity across industries, adding the equivalent of $2.6 to $4.4 trillion annually to the global economy.

And it’s clear many customers of software companies share this enthusiasm. The Inc. 5000 companies classified as AI companies saw a significantly higher three-year growth rate than their peers in the software industry: an average of 1,416 percent compared to 554 percent for software companies.

Take Snappt, for example, which creates AI-powered, fraud detection software for property managers. The fastest growing among this year’s Inc. 5000 AI companies, with a 6,322 percent three-year growth rate, Snappt leverages the technology to detect tenant fraud, verify income, and confirm IDs, boasting more than 99.8 percent accuracy in detecting fraudulent documents, according to the company.

Many of the AI companies on this year’s list focus specifically on the health care industry–also a large focus area for Battery–including CaryHealth, a Washington, D.C.-based digital-pharmacy system; Arine, a California-based medication-management platform; and Florida-based HealthWorks Analytics, which creates data visualization and analytics tools for public health professionals. 

You can build a great software company anywhere

Great software businesses are built everywhere, not just in Silicon Valley. We work with founders and entrepreneurs all over the United States (and globally) and often find ourselves meeting with companies based in Florida, Nebraska, Georgia, and Arizona–not just California.

We weren’t surprised to see that this year’s Inc. 5000 software and AI winners are all over the place, geographically speaking. Most are indeed located in California–114 to be precise–but there are 57 software companies in Texas, 36 in Florida, and 33 in New York, too. We also see more than 15 companies each in Illinois, Washington, Pennsylvania, Massachusetts, Virginia, and Georgia.

Among all the states, Arizona has the highest average growth rate for its software and AI companies, followed by Colorado, New Hampshire, and Washington, D.C. In Arizona, Lessen leads the charge, followed by higher-ed software company OneOrigin, also based in Scottsdale, and fundraising-software platform Virtuous Software, based in Phoenix.

When we asked Lessen CEO Jay McKee why he decided to build in Arizona, he answered, “I went to college at ASU and have my roots here in Arizona. Arizona is a great environment for doing business and has a great talent pool drawn from one of the top business schools in the U.S. The culture is very growth oriented and ideal for building companies.”

Other outliers from top states include Alpine IQ in Broomfield, Colorado, which creates retail marketing and loyalty software; Regrow Ag, an agriculture resilience platform based in Durham, New Hampshire; and public-safety software company 365Labs, based in Baton Rouge, Louisiana.

But, of course, the software communities in big cities like California and New York are as robust as ever. “New York is and will always be the original fintech hub,” claims FinMkt’s Luan Cox. “I’ve had the pleasure of building companies in Silicon Valley, San Francisco, and New York, and nothing beats the work ethic, competitiveness, and financial services focus that the talent in New York possesses.”

We are thrilled to spotlight the software and AI companies named to this year’s Inc. 5000 list, a well-deserved recognition of the resilience needed to achieve growth while navigating a tough and ever-changing market. These companies have not only demonstrated incredible market savvy, but they are embracing new technologies like AI, building new tech hubs across the country, and creating a more advanced future for us all, and we’re cheering them on.

The information contained herein is based solely on the opinion of Dillon Joyce and Satoshi Harris-Koizumi and nothing should be construed as investment advice. This material is provided for informational purposes, and it is not, and may not be relied on in any manner as, legal, tax, or investment advice or as an offer to sell or a solicitation of an offer to buy an interest in any fund or investment vehicle managed by Battery Ventures or any other Battery entity. The views expressed here are solely those of the authors.

The information above may contain projections or other forward-looking statements regarding future events or expectations. Predictions, opinions, and other information discussed in this publication are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Battery Ventures assumes no duty to and does not undertake to update forward-looking statements.