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Kobo spins off from Indigo, partners with Borders

When Shortcovers announced earlier today that it has re-branded itself as Kobo, it was clear some big changes were afoot at the company, which was founded just 10 months ago by Indigo Books & Music.

This afternoon, Indigo announced that it is transferring all of Kobo’s assets into a separate company, with Indigo as the main shareholder. According to a press release, Kobo has raised $16 million from a group of investors that also includes the U.S.-based Borders Group, Instant Fame (a subsidiary of Cheung Kong Holdings), and REDgroup Retail, which operates Australia’s Angus & Robertson and Borders chains.

The new partnerships will give Kobo distribution partners across the U.S., Canada, the U.K., the E.U., Australia, New Zealand, Hong Kong, and other territories. As part of the announcement, Borders U.S. will also launch a Kobo-powered store through its website and begin selling Kobo-branded mobile apps.

“We have assembled a strong syndicate of investors and partners across key categories – retail and mobile distribution,” said Kobo CEO Mike Serbinis in a press release. “We have a unique opportunity to power the e-reading revolution by reaching consumers everywhere they shop today, on any device they choose.”

The re-branding of Shortcovers comes amid rumours that the company is preparing to launch its own e-reader. Last month, Shortcovers filed a trademark with the Canadian Intellectual Property Office for a wireless e-reader also called Kobo. According to the press release, Kobo plans to “extend its platform by launching additional smartphone support, desktop and tablet apps, and its own dedicated e-reader devices.”

Kobo’s partnership with Borders gives the struggling U.S. chain a foothold in the burgeoning e-book market. Borders’ main U.S. competitor, Barnes & Noble, recently released its own dedicated e-reading device, known as the Nook.

“Our vision for a digital strategy that’s right for Borders is taking shape today through our investment in Kobo,” says Borders CEO Ron Marshall. “Borders shares Kobo’s vision to provide any e-book on any device, and we look forward to working closely with Kobo on content and distribution.”

Says Indigo CEO Heather Reisman,“We are very excited about the vision of Kobo and the opportunity to play a leading role in the emerging e-reading revolution. We look forward to partnering on the introduction of new services and reading devices and to providing our customers with the richest e-reading experiences.”

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