You probably know Boingo Wireless Inc., even if you don’t know it.
It's a company that runs Wi-Fi hotspots all over the country, and odds are you've used one. If you've logged on at a McDonald's or an airport in, say, New York or Chicago, you used one of the nearly 224 million Internet connections Boingo brokered last year. It's a big enough player in the Wi-Fi business that its stock ticker symbol on Wall Street is literally WIFI.
But Boingo, which is headquartered in Los Angeles, isn't content just being the McDonald's-and-airports company. It wants to get into homes — apartments, to be specific.
That's where Charleston comes in. Boingo agreed last week to buy a Charleston startup called Elauwit for $28 million in cash. Elauwit’s owners can collect an extra $15 million if the company's sales grow fast enough.
Elauwit contracts with apartment building managers to outfit their complexes with Internet service. Most of the company's 220 clients are in the student housing business, where its service is cooked into tenants' rent. But it's also edging into the rest of the apartment industry, where it would face competition from cable companies.
Boingo's bet is that if it can make Wi-Fi work in complicated buildings like airports, it can make it work in apartments, too. And it has some experience: The company runs Wi-Fi networks on 60 military installations. It also installs infrastructure for cellular service.
Elauwit is not a huge business, but it's growing: Boingo expects Elauwit to pull down sales worth $8 million this year, but it's predicting 20 percent-a-year growth, according to finance chief Peter Hovenier. The startup was already profitable if you don't count taxes, interest costs and accounting charges, an accounting measure known as EBITDA.
"It's still a relatively small business," Boingo CEO David Hagan said on a conference call with investors. "But as we scale that business, we think it'll be very profitable and generate a lot of cash flow over time."
Hagan told The Post and Courier on Friday that Boingo didn't expect to lay off Elauwit's 85 employees, who are split between its headquarters in Charleston and an operations center in Columbia.
It thinks Elauwit can edge out the status quo of new tenants calling up the cable company by making it easy to immediately fire up service, so a couple hundred apartments now could be the seed of something much larger.
The acquisition sent Boingo's stock soaring on Thursday as investors apparently bet on the company's foray into apartment buildings. Shares gained nearly 42 percent in a day, and the company's valuation popped some $403 million to roughly $1.4 billion. The company gave back about half of those gains on Friday.
And for a deal worth no more than $43 million, those aren't bad results.
The S.C. Research Authority is handing out grants to six startups around South Carolina, including three in Charleston.
The state-chartered economic-development agency, which focuses on high-tech companies, says its grants are worth up to $50,000, and they're meant to help startups win more significant financing later. That includes potential investments from S.C. Launch, its accelerator program.
In Charleston, the companies earning funding are Better IV, which has designed what it says is an easier-to-use catheter for IVs; Citibot, which developed a chatbot for residents to communicate with city governments; and Leukogene Therapeutics, which is using research from the Medical University of South Carolina to develop cancer therapies.