The news that Native Instruments has filed for Preliminary Insolvency shook the music industry, because the company’s tools have been used by so many, for so long.
Many have speculated about what led to the company’s decline, but the best take we’ve seen comes from Music Trades Editor Brian T. Majeski, who calls Native Instruments as “the industry’s latest private equity casualty”.
In his newsletter, he shared his analysis of the company’s decline after it was acquired by private equity firm Francisco Partners:
“After five years under the stewardship of Francisco Partners, the company that pioneered computer-centric music systems filed for bankruptcy protection in the Berlin courts on January 27.
The catalyst for the filing was a steep decline in sales, cumulative losses of €288 million ($339 million) accrued in 2023 and 2024, and looming maturities on approximately €262 million ($309 million) in debt.
The bankruptcy court has a mandate to keep Native Instrument intact as a viable business and they are likely to succeed. The company retains a valuable product portfolio that is used on 80% of the Top Ten Billboard tracks and has over 1.5 million registered users. However, there will be serious post-bankruptcy challenges.
Despite assurances from management that “business will carry on as usual,” consumers are understandably wary. Many are deferring or cancelling planned purchases out concern that the restructured company many not honor existing software licenses or provide product support.”
Recent moves left many Native Instruments customers puzzled:
- In 2022, Native Instruments and iZotope announced ‘Soundwide‘ as the new name of their parent company, and welcomed several new members to the Soundwide group of brands, including audio plugin platform Plugin Alliance and audio software company Brainworx. The goal was to provide end-to-end solutions, but the companies seem to have struggled to find synergy.
- Just a year later, they announced that the Soundwide brand had been dumped, and that iZotope, Brainworx, and Plugin Alliance would become part of Native Instruments.
- The company also frustrated long-time customers by neglecting or retiring loved products. In 2022, the company retired Absynth – one of its oldest and most powerful software synths. In late 2025, though, the company introduced Absynth 6. It was a welcome return, but also left many questioning Native’s strategy for its software synths and virtual instruments.
“The failure of Native Instruments is a complicated story, worthy of a full-length case study,” notes Majeski, adding that “Misplaced growth expectations, poor product development, and a healthy dose of hubris surely contributed.”
You can read more analysis and editorials by Majeski at the Music Trades site.
Have your own tak on what created Native Instruments’ predicament? Share your thoughts in the comments!
a lot of words for “we screwed the pooch for years and its everyone elses fault”
“The failure of Native Instruments is a complicated story, worthy of a full-length case study,” notes Majeski… This statement is premature because NI hasn’t failed, so stop it already. As of today and of the day this Majeski published his article, NI is doing business as usual. IF they fail, then the quote above is warranted.
Yeah, once you have to get court protection to keep your creditors from collecting because you owe people more than you have and the payments are due it’s pretty fair to call that failure in terms of the business entity itself.
Not at all. It’s protection for them to try to sort things out. Bankruptcy also provides protection for the creditors because some payment is better than nothing and the stewardship prevents the creditor with the most lawyers from cleaning them out first. Plenty of companies come back from bankruptcy.
What PE firm Francisco Partners did to accelerate this (or not), we’ll have to see.
Yet was the failure on Native Instruments’ part, or was it their vulture capitalist investors – Francisco Partners – who continued to take on debt without giving their new acquisitions the follow-through required to make the acquisitions profitable?
The NI executive team certainly has failed. Their decision making process is like a ship setting sail without a rudder or even a destination marked on a chart. There needs to be some sane company to take over this ship rather than take the pause of a financial reorganization and simply let the same fools keep doing what they have been doing….
I forbid Native Instruments from going under until a new Maschine controller and standalone is released! *slams gavel*
Unfortunately, I think that new machine controller is going to be a MPC after inmusic buys them and integrates them into their platform.
Its the VC playbook – over promise growth to get VC.
Chickens come home to roost at later date when “misplaced growth expectations” meet reality.
“How do those Vampires sleep at night?!”
“…oh. right.”
Would be interesting to know how much debt they had before the vc take-over.
The Absynth 6 release is a classic example of a last-ditch attempt to raise revenue; bring back a golden oldie. Obviously too little too late, asking too high a price for very little update (no more time and money to do more ).
I hope they can be saved.
I’m not convinced that the Absynth 6 upgrade was the failure which you paint it as. Sales might have fallen off a cliff after this restructuring announcement, however.
Growth by acquisition is not growth. It’s accumulation. Once we start to accumulate a lot of things, the principal challenge then becomes management of those things. A simple root example are consumers with pictures. It starts out with some “important cherished photos”. Then, they just start taking pictures of everything all the time. Three years later they are finger scrolling their phone unable to find anything anymore and ran out of space. They forgot the management part. They just accumulated. Companies do this too and all of a sudden it gets away from them and that promised “synergy” is lost. I have no doubt that is a great part of what happened here. The big difference between that and photos is, of course, debt.
Excellent analogy.
The main strategy PE eye’s for accumulating, is raising prices, as was the case of Uber and Grubhub and many others. Once the market’s cornered, you can raise prices all you want. Not sure how or if that was part of Francisco parter’s investment strategy – I personally can’t see how that would work in the music world where there’s always some creative and cash challenged artists willing to break down barriers and invent new solutions to problems.
Is this for their software, hardware or both?
I read long ago that they had too many devs on their payroll !
I believe they got rid of almost all of the hardware side. Maschine is getting Kored.
“The company retains a valuable product portfolio that is used on 80% of the Top Ten Billboard tracks”? According to who?
NI just needs new management that dont abuse planned obsolescence like they did for years and to put out stuff people actually want (hint: not sample packs). Remember when they said they would turn Maschine software into a full DAW only to years later release some PAID update? Uncle Benz remembers.
30 songs reached the U.S. Top 10 during 2025. 80% equals 24 customers for NI. While professional users might be prestigious and useful for marketing, they are economically insignificant. 99.999% of users are hobbyists.
Your statistics ignore the fact that composers are 0% of the US Top 10. Composers could be professionals, not hobbyists.
Of course there are many more music professionals than just the top 10 producers that NI cited (about 100.000-250.000 worldwide). Even so, their number is too small to sustain a company of NI‘s size. That’s why they focus on hobbyists and semi-professionals (about 75 million worldwide), as do most major music tech brands.
I have yet to see any analysis of this situation mention the fact that the plethora of HIGH-QUALITY FREE plugins has certainly eaten into paid plugin profits. I have been using both MODO Drums and the MT Drums free for years. The MT drums sound organic and great. Many sounds on my songs come from free plugins like Spitfire, Bacon Paul, Full Bucket Music, Monster, Blaukraut, etc. Yes, I have East West, Diva and Pigments. But these freebies are high quality. I love Mondo drums and bass for example. So now these companies have to keep their eye on innovation that comes from the world of free. For now.
Free plugins were around before Native Instruments was, and they’re not causing all developers of paid plugins to fail.
“Private equity” is the polite way to say “You’re going to get screwed with your pants on.” That’s one of the top definitions of “Business as usual.” Say goodbye to the Washington Post, as Bezos guts it. I wonder why so many billionaires deserve to be eaten by ants. Too much money seems to corrode peoples’ humanity. Oh well! I’m increasingly glad not to own anything from NI. What a towering mess.
Everything i have been them is an unintuitive interface that is also a memory hog.
Much of it sounds excellent but there are less annoying options for almost all of it.
They want to “Lucy” their clients annd the people they money and enjoy their personal estate. Native instruments – Melda 0 -1.. Guess who is more reliable in the end…
Hey Xrx, what does “Lucy” mean as a verb in this context?
It’s from a comedy series Hank Azaria stars (Brockmire)..
I feel like this “acquire / extract value / destroy” pattern that often happens when Private Equity or Vulture Capitalists buy out companies is incredibly frustrating. I wish there was a way to regulate and prevent this pattern from recurring.
Acquire / extract value / destroy is a sh!tty way to make money and in this case, it’s going to leave artists/creators without major portions of their toolkits, and the world will be worse for it.
I hope not many others follow.
Softube among many others has also become a „200 normal price but for this week buy for 39“ kind of fruit market atmosphere.
While i find it nice that one can buy things at more affordable prices it also seems
like more and more companies dont seem able to sustain themselves
however i hope i am wrong
What did them in is the fact that the private equity group started making the decisions for NI. The mistake NI made was allowing the group to buy them. Private equity groups are notorious for restructuring and stripping companies for parts.
Let´s not forget the “go woke” aspect in Germany: Native Instruments have invested a significant amount of time and money to re-write every document, every webpage etc. in so-called “gender language” – featuring grammatically wrong wordings, opposing the original and accepted German language in order to cater the woke community while basically making it impossible to properly understand these sentences for people with limited literacy, visual issues etc. So it seems – like Apple and many others – that those companies think: Hey, we can discriminate on people as long as we please others. What a weird concept.
I have received a lot of comment by visually impaired people who have massive issues getting their screenreaders to properly read the wordings and when NI sometimes put 4 to 5 gender stars into one paragraph you just stop reading stuff!
whut
I find this INCREDIBLY unlikely to be true. As someone who has worked on making website text accessible for the visually-impaired (and a post-doctoral researcher in exploring the utility of digital tools in accessibility and participation), my experience is that is simply not how screen-readers work. Perhaps the technology is fundamentally different in Germany (again, seems very, very unlikely) but this sounds like a smokescreen for you own anti ‘woke’ stance.
Vulture Capital, for the win.
After they dumped the sound whatever brand-name and went back to using the NI brand name, was the VC company still ‘Managing’ NI at that time?
If the VC was running the show and this happened on their watch, yes very suspect.
That means there are players in the wings licking their chops for a different part of the turkey to eat.
So NI, used the VC money and acquired all of the other companies.
So they run the company into the ground, file for bankruptcy protection, golden parachute indemnification. Putting all the subsections on a chopping block or the brands under the NI umbrella whereas each individual organ or part of the turkey will be consumed by a new and different entity if the turkey is parted out.
Turkey tall 101.
I used to think the looper in Guitar rig was the best but Undolooper is better and its free so no wonder they are bankrupt
Banned sales and provided partial support in Russia?
Of course hobbyists are connected with global things.
Take this boomerang back, NI.
I’m not a business specialist and don’t understand all the ins and outs but may I just say that it would be a shame for the music business if NI disappear.
They by far always been the best in the industry.
Lots of useful stuff for musicians, composers and producers.
I am planning to do my best to support them by purchasing more stuff from them.