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Tuesday, November 8, 2011

Kobo Sold for $315 Million

Kobo Books Sold for $315 Million

November 8th, 2011 by Nate Hoffelder 


Kobo just announced in the past hour that they’ve been sold to Rakuten, a Japanese web retail giant, for $315 million.

Details are still scarce, but the press release is already out and it covers the basics. Rakuten will be buying out everyone, including Indigo Books, who will be getting somewhere around $160 million for their chunk of Kobo. Not much will change after the sale. It’s already been announced that Kobo will continue to operate as an independent company and keep their offices in Toronto, NYC, and their other locations.

Kobo were launched by Indigo Books, a major Canadian bookseller, in December 2009 when they spun out Shortcovers, their ebook subsidiary. The company was expanded with new capital investments from Redgroup Retail, Borders (US), and a Hong Kong based venture capitalist. Kobo also went through a second round of financing earlier this year where they picked up another 56 million dollars. Those funds are being used to fuel Kobo’s international expansion including recent forays into Germany, France, and the UK.

Kobo are often regarded as the third major ebookstore, and they are the most widely distributed.  But they also have fairly shallow penetration into any one market, with US market share estimated to be around 3% to 5%.
This is good news for Kobo, Rakuten, and it could be good news for customers. Kobo are being picked up by a digital powerhouse. They are pretty much in the same position as Mobipocket were in when Amazon bought them in 2005. Amazon wanted an ebook platform and they bought the best available. Then Amazon dismembered Mobipocket, but that’s Amazon for you. Luckily for Kobo, Rakuten won’t have the opportunity to dismember the company. They probably want to get into ebook sales as quickly as possible, and that means Kobo are more likely to gain new staff, funding, and assistance from other parts of Rakuten.

Update on Rakuten: They’re being  called the Japanese version of Amazon. Among other companies, they own, UK based, and Linkshare. They also have a vast retail site at, so my description that this is similar to Amazon buying Mobipocket  turned out to be very accurate.

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