November 10, 2011
By the ZippyCart Content Team
Japanese ecommerce solution giant Rakuten will be acquiring the Canadian ereading service Kobo from majority shareholder and founder of the service Indigo.
Indigo is Canada’s largest book retailer and founded Kobo in 2009 to compete with Amazon’s and Barnes & Noble’s ereaders. The Kobo ereading platform has a catalog of more than two million ebooks, magazines, and newspapers. The company also currently has two ereaders on the market, the Kobo Touch and Kobo Vox, and Kobo apps are available for a wide variety of iOS, Android, BlackBerry, and Windows devices.
Tokyo-based Rakuten will acquire Kobo for a total of $315 million, the ereading service will continue to operate out of its Canadian headquarters in Toronto and will retain its current management team and employees. Indigo expects to receive approximately $150 million from the sale of its stake in Kobo. The company hopes that Rakuten will provide the necessary investment boost to strengthen Kobo’s standing in the ereader market and expand its customer base. Heather Reisman, CEO of Indigo, had this to say:
“Rakuten will allow Kobo to meet the demands of competing with the very best players in the world. Notwithstanding the sale, Indigo will maintain a very strong relationship with Kobo, supporting the products and the services both in store and online and directly benefiting from the growth of the Canadian ereading market. The success of Kobo confirms that Indigo is a great brand and a strong platform on which we can continue to innovate and grow.”
Rakuten is one of the world’s leading ecommerce solution platforms with more than 10,000 employees throughout Asia, the Americas, and Western Europe. The company has made a series of acquisitions of diverse ecommerce companies over the past two years including Buy.com, the UK’s Play.com, Brazilian company Ikeda, and European PriceMinister. Michael Serbinis, CEO of Kobo, said the following about Rakuten’s acquisition of the ereading service:
“Kobo will continue its aggressive growth trajectory with Rakuten’s support. We look forward to continuing to innovate, provide the best eReading experience for customers, and expand internationally to solidify Kobo’s leadership position in the global eReading market.”
Indigo’s decision to sell its majority share in Kobo comes after they announced a loss of $40.4 million in the second quarter. Sales in Indigo stores were going down while Kobo sales were going up as more people make the transition from hardcovers and paperbacks to ebooks. Indigo still plans to support Kobo after the sale and carry Kobo devices in its stores. The sale to Rakuten is set to close in early 2012.
Gavin is a graduate of Washington State University where he studied Communication with a public relations emphasis. He left Pullman behind and currently resides in the Queen Anne neighborhood of Seattle where you might run into him at happy hour. When he is not writing something for ZippyCart he enjoys travelling. His favorite film is Pulp Fiction (Say what again. Say what again, I dare you, I double dare you...! ) and his favorite movie genre is zombies. Follow him on Twitter: @_gdonnelly
