Indigo launches digital book spinoff
Partners include well-known industry names
Canada's largest bookstore chain — Indigo Books & Music Inc.— said Tuesday it has spun off its Shortcovers digital book business to Kobo Inc.
Kobo is a new company controlled 58 per cent by Indigo. It has secured $16 million in funding, including $5 million from Indigo.
Among the other partners are major book retailers in the United States and Australia, and a Hong Kong conglomerate involved in everything from cellphones and real estate to shipbuilding and life sciences.
They include Borders Group Inc., Instant Fame — a subsidiary of industrial, telecom and real estate giant Cheung Kong (Holdings) Ltd. of Hong Kong — and REDGroup Retail Pty. Ltd., a major book store chain in Australia.
"Kobo is an exciting initiative which will put both Indigo and Kobo at the forefront of the new digital reading revolution," CEO Heather Reisman said in a release.
Indigo sells under several banners including Indigo Books & Music, Chapters and Coles. Kobo has about two million electronic books in its library.
Marketing firm Forrester Research said recently electronic book sales rose 176 per cent in 2009 and in 2010 are expected to top $500 million in the U.S. alone.
Cheung Kong is one of Hong Kong's biggest property developers, with substantial interests and operations in life sciences, telecommunications, shipping, oil and gas and other sectors.
The Chinese company, controlled by billionaire Li Ka-shing and his family, is also the dominant shareholders in Calgary-based Husky Energy Inc., one of Canada's biggest oil and gas companies and gasoline refiners.
With files from The Canadian Press