March 20, 2015
Japanese company that owns Kobo buys OverDrive for $410 million
by Claire Kelley
Insight Venture Partners, OverDrive’s majority shareholder since 2010, has reached a $410 million dollar deal with Rakuten, a Japan-based digital content company, to purchase OverDrive, the main distributor that libraries use for ebook lending.
What’s interesting about this deal is that Rakuten is the parent company of Kobo and a rival of Amazon, which might influence the company to rethink Overdrive’s partnership with Amazon for library ebooks. According to PC World, Rakuten executives in Tokyo said this week that they see “huge growth potential in the public library ebook market,” which only accounts for 7% of book sales in the United States at the moment.
“The near-term opportunity is for us to do a more direct integration with Kobo apps and devices, where you can instantly borrow a book from a school or library and have it appear on your Kobo bookshelf,” OverDrive CEO Steve Potash said.
The move is also being seen as an attempt for Rakuten to try to add to its portfolio of digital commerce companies, which include messaging, streaming, and video apps and websites—some of which will begin to accept bitcoin payments this year.
Claire Kelley is the Director of Library and Academic Marketing at Melville House.