Growth Rate: 1,857%
2007 Revenue: $9.8 million
Pentadyne Power Corp.'s unusual backup power systems are generating some serious interest.
The advanced flywheel devices are proving an attractive and reliable alternative to battery systems for airports, hospitals and other big users of electrical energy that can't afford to lose their power even for a moment.
"It's a very efficient machine," said Pentadyne Chief Executive Mark McGough. "Our product is more reliable than batteries. It lasts longer; it's less expensive to own."
Pentadyne's flywheels use small amounts of electricity to spin a rotor inside a nearly frictionless vacuum. When power is cut, that spinning rotor turns a generator that can produce enough electricity for an entire hospital wing or more before traditional backup generators kick in.
With more than 600 systems sold since commencing commercial operations in May 2006, the Chatsworth-based company has become one of the largest flywheel companies in the world. At the same time, an astounding 1,857 percent growth in revenue from 2005 through 2007 has landed Pentadyne atop the Business Journal's annual list of the fastest-growing private companies.
But getting to this point was no simple task.
The company's origins extend back to the early 1990s, when Benjamin and Harold Rosen, the founders of Compaq computers, started Rosen Motors with the intention of developing hybrid electric power systems for automobiles. Though the car company never amounted to much, it spun off a pair of Los Angeles-area power companies: Pentadyne and Capstone Turbine Corp., which develops and manufactures microturbines.
Pentadyne was incorporated in 1998 and developed its proprietary technology for years before beginning commercial operation. Over that time, the company received investments from venture capital firms, including Santa Monica-based Rustic Canyon Partners, as well as electric utilities such as Detroit Edison.
The $50,000 flywheel system lasts for about 20 years. That is more expensive than a battery-based system, which can run about $25,000.
But McGough is quick to point out that the flywheel system lasts significantly longer: "It's less expensive over the life of the product."
Pentadyne's sales approached $10 million in 2007. Though the recent growth could be difficult to sustain as the nation flirts with recession, McGough is hopeful.
"Like most companies, I think we're going to have our challenges in front of us as we go through this recessionary economy, but we're still growing," he said, pointing out that backlogs are near all-time highs. "What we need to be prepared to handle is that protracted recessionary approach to spending that our buyers could embrace."
Many of the company's customers, however, need to ensure that they have sufficient energy backup systems regardless of the economy.
Earlier this year, San Jose International Airport bought a Pentadyne flywheel system to power its security cameras and other operations.
"We use the flywheel with the battery backup system to supply power to our airport control center," said Shashi Naik, an electrical engineer for the airport. "It's excellent. We have never had a problem."
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