New eBook Service Kobo Launches, Raises $16 Million From Borders, Others
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Add another entrant to the white-hot eBook market ... Kobo, a startup backed by Borders. After all, Borders can’t afford to let Barnes & Noble (NYSE: BKS) and Amazon.com (NSDQ: AMZN) gobble up all the market share this early in the game.
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Newly-launched Kobo has spun off from parent company Indigo Books & Music; the Canadian book retailer first launched the mobile-based eBook service under the Shortcovers name in February. The eBook apps caught on quickly—racking up a million downloads—attracting interest from a group of international investors, including Borders, Hong Kong-based Cheung Kong (Holdings) and Australia-based REDgroup Retail.
Kobo has raised $16 million in its first institutional round; Indigo Books & Music invested $5 million for majority stakeholder status, the other three companies put up the remainder. The international influence gives Kobo an instant global distribution footprint; the company says its library already has over two million books for sale, with an additional 1.8 million free titles available. The handset-agnostic platform means that BlackBerry, iPhone, and Android users can all access the eBooks; some titles are transferrable to Adobe Digital Editions-compatible eReaders.
Meanwhile, Borders clearly intends to make-good on its investment from the start, as it is launching a new Kobo-powered eBook store on Borders.com. Tucked into the bottom of Kobo’s launch release is news that the company will develop its own eReader device in the future—and with its stake in the company, that means Borders will also be able to compete with Amazon’s Kindle and B&N’s Nook in the long run. Release.
Posted In: Media & Publishing, Books, Mobile, Money, M&A & Venture Capital, Venture Capital, Countries, Canada, borders, kobo
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