Japan-based online retailer Rakuten acquired the Canada-based eBook retailer Kobo on Wednesday for $315m in cash.
Kobo was spun out from book, gift and toy retailer Indigo Books & Music in December 2009, at the same time raising $17m from Indigo, along with Instant Fame (a subsidiary of Hong Kong-based conglomerate Cheung Kong Holdings) and book retailers Borders Group and RedGroup Retail, both of which have since gone bankrupt.
The series A round was followed up, in April 2011, by a further $53m garnered from previous investors, though Indigo remained the majority shareholder in Kobo.
Kobo sells eBooks, its own range of eReader hardware on which customers can read them, and eReading mobile applications allowing customers to download and read eBooks on their smartphones.
Rakuten is looking to use the acquisition to expand into the eBook market, but with a view to using eBooks as a base for creating an extensive range of downloadable media products to consumers.
In an interview with the BBC, Rakuten executive Pierre Kosciusko-Morizet explained: "We feel that an ebook reader will ultimately not be only about selling books. It’s about potentially selling other digital goods and it’s also about being in consumers’ homes with a hardware device."
Hiroshi Mikitani, chief executive officer of Rakuten, said: "Kobo provides one of the world’s most communal eBook reading experiences with its innovative integration of social media such as Facebook and Twitter; while Rakuten offers Kobo unparalleled opportunities to extend its reach through some of the world’s largest regional e-commerce companies, including Buy.com in the US, Tradoria in Germany, Rakuten Brazil, Rakuten Taiwan, Lekutian in China, TARAD in Thailand, and Rakuten Belanja Online in Indonesia, and of course, Rakuten Ichiba in Japan."