Vergent rides wave of growth post-pandemic

2023 Mercury 100 fastest-growing private companies

LOVELAND — Electronics manufacturers may have been cautious as the COVID-19 pandemic took hold in 2020, but when the economy rebounded, companies that prepared were set up to ride the wave of demand.

Vergent Products Inc., a Loveland company, was one of those that prepared.

Its two-year revenue growth jumped from $7.2 million in 2020 to $14.6 million in 2022 — a 101.5% increase, which earned it recognition as one of the fastest growing companies in Northern Colorado.

Vergent, a contract manufacturer of electronic components, is among this year’s Mercury 100 winners — companies that have shown substantial growth in revenue over the past two years.

“The development cycle for an electronic product varies by project and industry, but is generally a long cycle,” said John Sage, the vice president of business development for the company. “When you put COVID on top of that, it complicates that cycle extensively.”

The company had a solid base of existing clients and grew its customer list during the pandemic.

“Four of our top 10 clients were projects that we uncovered during COVID. We shepherded them, they put projects on hold, and then as COVID started to end, they wanted to go fast. That was consistent across many clients. Everybody wanted to go as fast” as the pandemic waned. “We were in a perfect position,” Sage said.

Jay Dokter, CEO of Vergent, said the company’s market sectors are strong. It works mostly in the industrial space, but is adding aerospace and defense. 

“We’re pretty good at what we’re doing. Our on-time delivery has been 97%, right through COVID,” he said. The company didn’t lay off any workers during that period and now has about 85 workers, double what it had in 2020. 

Returns were 0.02%. Its net promoter score stands at 71.4%. The net promoter score is a measure used to gauge customer loyalty and often is gleaned by asking the question: On a scale of 0 to 10, how likely would you be to recommend a company to a friend or colleague?

“When you perform, you get more business or at least don’t lose business,” Dokter said.

Hot sectors for the company are related to “today’s awareness on the environment,” Sage said. Industrial clients are looking for air quality monitoring, water quality monitoring, energy usage monitoring products.

The company is experiencing a slowdown this year. “We believe it’s a short-term slowdown,” Dokter said. He said companies coming out of COVID, because of supply chain disruptions, wanted delivery of as much as Vergent could build. Now, those companies are burning through their inventories, he said.

“We see it coming back strong later this year,” Dokter said.

Vergent has issues of its own regarding the supply chain, with electronic components in better shape but still a problem. Microchips require a long lead time.

“We have clients who say they want to build a product in three months, when it might take nine months or a year to get components. We’re working with these clients to change designs or mitigate risks of the long supply chain,” he said.

When Vergent gets an order, it immediately buys the items that have a long lead time. “We have sophisticated software that helps us source products,” he said.

Most of Vergent’s customers are domestic but some of those companies manufacture in Asia. The onshoring trend, with American companies returning manufacturing to the U.S., has benefited Vergent, too. Still, it signed an agreement with a component manufacturer in India to produce components should Vergent be unable to do so. So far, the two companies have shared business leads but nothing that’s reflected in the 2022 revenue that forms the basis for Mercury recognition, Dokter said.

Sage said that he predicts revenue will be up again this year, although not at the level seen in the past two years. New products and leads have doubled in the past couple of months, Dokter said.

To position itself for additional growth, Vergent will relocate from its headquarters at 609 14th St. SW to the Forge, which is the former Hewlett-Packard Co. facility down the street. Dokter is a partner in ownership and revitalization of the Forge.

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