According to insolvency documents, Berlin-based Native Instruments GmbH (also parent to iZotope, Plugin Alliance, and Brainworx) is in preliminary insolvency proceedings. This is significant news for one of the biggest brands in music-making technology.
Important clarification: While Native Instruments GmbH is the parent for these companies, there are still some business entities that operate outside that GmbH. It’s not clear which of these may be directly part of these proceedings. Specifically, Plugin Alliance (USA and Germany) says they are not — details. It’s unclear to me whether the same is true of Native Instruments USA in Boston, the apparent successor of iZotope following the acquisition. In that case, though, some of iZotope’s operations are now in Berlin.
Prof. Dr. Torsten Martini is listed as a preliminary insolvency administrator for the company (“vorläufiger Insolvenzverwalter”), which means he would be responsible for restructuring. (I can confirm his involvement, in addition to what’s on the document.) Without too much speculation, that means NI’s various assets will be sold off in some form — now a process that’s out of the hands of NI executives and owners.
Since 2021, Francisco Partners had a majority stake in NI and remains the parent company. There’s probably more to say about how NI got here — both as part of industry trends and its own unique story — but that can wait for now.
The reach of NI is hard to overstate. Users of Maschine, Komplete, and Traktor are invested in integrated hardware workflows. Reaktor and Kontakt are ecosystems of their own for many development houses. Partner deals are impacted. Countless users have poured time into Reaktor creation. And every single product across the stable you know means something to someone daily. So seeing how this unfolds will be important.
Employees should be supported in the short term, but I know this is going to be a hard time for NI operations and people. Here’s hoping for better times for NI employees and tools past this transition. This is also not a great omen for the rest of the industry, to state the obvious.
I know this will also raise concerns for NI product owners, for the time you’ve invested in tools from Kontakt to Reaktor and beyond. So I’ll do the best to relay those implications in the coming months as they become clear. We’ll have to see how the company’s current “Soundwide” state (with iZotope and the others, what is currently called Native Instruments GmbH) might be broken up and sold.
For the short term: it’s important to note that basic operations in this kind of scenario will continue; this stage of the process does not mean the lights go out. There will be an outcome to all of this — there needs to be, because the purpose of the insolvency proceedings is to pay creditors while shielding the company from action. That means that whereas a small independent company without debt can decide to shutter at a moment’s notice, NI’s valuable assets (e.g., Kontakt) absolutely need to find a new home and/or continue to operate to pay off outstanding debts. But it does create some uncertainty, meanwhile, which I know is a source of anxiety.
There’s also no indication of trouble with the health of NI’s core business. NI accrued debts through massive expansion and high-cost acquisitions, not as near as I can ascertain, any failure of the company’s products or the teams who develop, support, and market them.
For all the ups and downs, you’ve given us some incredible tools, NI. And I have so many memories with NI staff, past and present. So I do hope that whatever happens to NI’s business structure, the instruments and talent do find a good home.
I’ve reached out to NI for comment, but have not yet received a response.
This article was updated with the “for the short term” clarification, as I received reader comments that suggested this was not obvious.
Addendum:
I do think it makes sense to think of this as the next stage of an ongoing process. For a while, we’ve had some indications that a development like this was coming, but the publication of the insolvency proceedings in Germany makes that information public.
It also seems that creditors had already taken ownership of the company. The EU sent a notification in November that Bridgepoint and Bain Capital Credit acquired Native Instruments Group from Francisco Partners. (That’s the same business structure as registered in Germany, NI GmbH.) Essentially, eventually any bank does want its money back if you can’t service a debt.
You can also find a slightly older financial filing — here’s December 31 2023. That shows £250 million of debt versus $25 million Earnings before interest, taxes, depreciation and amortization. While those numbers aren’t current, I believe the approximate ratio is, and that tells you all you need to know about what’s happening here. The normal operation of the business just can’t keep up with vast debts at present interest rates. So the people actually running NI and doing its day-to-day business don’t stand a chance unless a restructuring separates them from that debt.
Elsewhere:
Greg Savage nicely explains this process in lay terms for those unfamiliar:
Native Instruments Insolvency – Should Composers and Musicians Be Worried?
And yes, that’s fair — also the fact that the red flags financially came far earlier than today, and were related to the company’s debt following acquisitions, not the health of the products or market.
Tim Exile, a long-time Reaktor developer and artist whose own platform Endlesss shut down in 2024, writes on Bluesky:
“The chances of the lights going out are very slim imo, knowing a bit about this process. It’ll just come down to what price will be paid for the assets / entity. Entering into this phase of insolvency actually makes a good outcome for customers way more likely.”