Native Instruments GmbH is in preliminary insolvency

[Satya]

https://cdm.link/ni-insolvency/
Native Instruments GmbH, the Berlin-based music technology giant behind Komplete, Maschine, and also parent to iZotope, Plugin Alliance, and Brainworx, has officially entered preliminary insolvency proceedings as of January 27, 2026. A court-appointed administrator, Prof. Dr. Torsten Martini, is now overseeing restructuring, meaning control has shifted away from company executives.

31

[Brian]

🤯

[LinkedMusicians]

Like many of our members, Kontakt is an integral part of my creative toolkit.

For those struggling to understand what this means, this is similar to a US chapter 11 bankruptcy. It allows a company to restructure its debt. NI is not fully insolvent. It would not be surprising if NI sells off parts of its business during this process. Mergers and acquisitions can always be fraught with risk and NI has done a fair amount and not successfully integrated them.

As a former Fortune 500 business strategist, whose duties included assessing potential acquisitions, I looked at acquiring companies as large as — (and including) companies like Intuit — and am well aware of how acquiring companies at a brisk pace as NI was doing can quickly put a company in a bad situation. Consider how quickly economic environments can change things or the impact of a poor integration. All of these were factors for NI’s acquisitions. Even more, the consolidation of iZotope, Plugin Alliance, and Brainworx did not appear well-managed and obviously wasn’t a success. Add to that Francisco Partners — which has a majority stake in NI — pushed for short-term profits, as Francisco Partners itself was struggling and had a series of layoffs and leadership changes.

If you’re thinking to yourself — wait, I thought the industry had been experiencing growth in recent years? You’re right. It has. The digital side of the music industry has been growing (while physical instrument exports have been declining).  But NI’s internal operational problems and reactions to shifts in the market and following acquisitions appear to have led to the current situation.

Most of all, my heart goes out to their employees. I’m sure this news will also give many independent Kontakt developers pause. I’ve always given the advice that diversification is extremely important. This news should underscore the importance of diversification (in this case, it’s as simple as having sample libraries in multiple platforms). Kontakt will almost certainly survive this.  I would expect that the brands / products that likely will be sold off will come from iZotope, Plugin Alliance, and Brainworx.

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6

[jude77]

Yow!  Just got a bit of a knot in my stomach.  Needless to say, I, like a lot of other folks, are pretty heavily invested in Kontakt.  I read the article that Satya posted and it looks to me like Kontakt will be sold.  Hopefully that will be to someone who wants to invest in and continue its existence.

• This reply was modified 2 months ago by jude77.

3

[LinkedMusicians]

On jude77 said

Yow!  Just got a bit of a knot in my stomach.  Needless to say, I, like a lot of other folks, are pretty heavily invested in Kontakt.  I read the article that Satya posted and it looks to me like Kontakt will be sold.  Hopefully that will be to someone who wants to invest in and continue its existence.  Peter, we need you to weigh-in and tell us what all this means!!!

Well, I think you and I were posting at similar times. I would expect that Kontakt is their most valuable product and if NI doesn’t continue to own it, they would sell it off to another company. In either case, it’s too valuable of an asset for it to go away, so I wouldn’t be too worried about Kontakt disappearing. I think what’s more likely is that recent acquisitions that aren’t essential to the core business are the ones that will likely be sold off to raise cash.

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4

[jude77]

Peter, thanks for that.  I think my blood pressure just dropped 10 points.  I’s liking the idea that Kontakt is too valuable to just vanish.  I was hoping that was the case as I read Satya’s article.  I’d love to know what developers, such as OTS, who are heavily invested in Kontakt are thinking.

1

[mira]

hello dear guys, this is for me hard impact and very bad news – i invest in NI almost from start – same in PA i have most interest plugins they do to year 2023 + some izotope ones…. but for ni machine, kontakt, reaktor… hope some big company buy it and will be continue , if not …..

• This reply was modified 2 months ago by mira.

1

[LinkedMusicians]

On mira said

hello dear guys, this is for me hard impact and very bad news – i invest in NI almost from start – same in PA i have most interest plugins they do to year 2023 + some izotope ones…. but for ni machine, kontakt, reaktor… hope some big company buy it and will be continue , if not …..

I wouldn’t fall into despair about this. Think of it this way, NI did some big acquisitions over the past several years and things didn’t pan out as they hoped. This gives them time to pay off their debts and restructure. Their debtors don’t want to see NI go under and then not see even a small fraction of what was owed. NI could be bought by another company, but I think that’s unlikely at this time. It’s much more likely that NI will sell off the businesses/brands / product lines that didn’t integrate and succeed, which will give them the cash they need to operate and pay their bills. Right now, it’s all about how well they manage and navigate through this process.

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4

[Brian]

FWIW I see the linked article in the first post has been edited quite a bit from what I read an hour ago.  A little less “end of the world” feel.  My biggest concern is my NI hardware, as far as ongoing support and updates.

1

[fretman]

I’m still a heavy iZotope user, but their current upgrade pricing has caused me to stop buying. Not sure what I think about this…

Studio One, Windows, RME UFX, Yamaha MSP7

1

[mira]

NI forum thread

 

https://community.native-instruments.com/discussion/49857/rumour-native-instruments-gmbh-is-in-preliminary-insolvency/p2

1

[LinkedMusicians]

On fretman said

I’m still a heavy iZotope user, but their current upgrade pricing has caused me to stop buying. Not sure what I think about this…

I stopped buying Izotope after they discontinued my bundle and I had everything in another bundle — and more — and they refused to offer me upgrade pricing. I had advanced versions of regular plugins in the bundle and everything else, and they still told me that I didn’t qualify for the bundle. I really like Izotope products a lot, but their upgrade policies caused me to find alternatives (I feel the same way about Toontrack with their refusal to give upgrade pricing for Superior Drummer 2 users, but their drum plugin and ecosystem is so much better than anything else on the market, I eventually gave in). I’ve found Sonible to be better much better to deal with. I think Izotope, Plugin Alliance and Brainworx futures are all in question with this insolvency. Unquestionably, NI is going to be selling at least some of these brands off, and if they can’t find buyers, they’ll be retiring some of the product lines.

The level of competition and the dramatic changes in pricing (drops) in the market have made it a lot more difficult to make a decent profit. The greater accessibility (AKA price reductions) that we’ve seen take place in plugins and sample libraries are great news for music producers and combine that with the fast changes in technology in this industry — largely driven by AI — and the competitive environment has significantly changed in the last several years while NI was doing those acquisitions. They can’t count on the same margins they had when they started their buying spree.

I think this should also cause those who make assumptions about product longevity. I remember at Cakewalk Forum, when Waves announced they were going subscription only I predicted they would reverse course within two months (the post still exists). A certain Cakewalk Forum poster — who loved to serially troll me and has done it even when I’m not there — mocked me, stating that I had no idea what I was talking about (always with the insinuation that I’m arrogant for sharing my background).

It turned out that it only took days before Waves reversed course on their subscription-only strategy. Why was that so easy to predict that they would reverse course?

Because companies sometimes make really obvious strategy mistakes. I can tell you that being inside global brands, advising brands, and being the go to guy (non-finance) strategy person on acquiring companies, that often what looks like terrible strategy on the outside is indeed terrible strategy, but it often occurs because top management is isolated from reality and corporate leadership commonly falls into surrounding themselves with yes men/women. It’s very risky to be the person who stands up and says, “No, what everyone is telling you is wrong. We made a mistake and we need to take corrective action” or, “Acquiring this company really isn’t a great fit with our market, strengths and brand image.” Doing what is right strategically comes at the risk of derailing one’s career, and that’s why it’s rare. Bad strategy often happens as a result of a dysfunctional corporate culture.

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1

[LinkedMusicians]

It’s also worth noting that by US standards, Native Instruments is considered a small business. On forums, people talk about NI as if they’re a really huge corporation; they’re not.

NI has 400 to 500 employees and are estimated to have annual revenue of $78.5M to $113.7M. That’s pretty far from Microsoft and Apple or even a mid-size company (by US standards). A lot of these independent developers we love are one to several-person shops. I see people talking about 8Dio / SoundPaint like they’re a big company — they’re not. They have several employees. EastWest, one of the larger sample developers in the business, and also, a popular recording studio, has 50-100 employees.

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[mustakatu]

On mira said

NI forum thread

 

https://community.native-instruments.com/discussion/49857/rumour-native-instruments-gmbh-is-in-preliminary-insolvency/p2

Coined a hilarious interview with Dirk Ulrich from there: https://www.youtube.com/watch?v=y4C2v9ZyhBw&t=4965s

2

[SoulfulKeys]

I like a lot of their products but don’t buy often since they charge the same prices even when the products have aged. This is also a good example of why many of us are apprehensive about subscriptions.

[patrickwichrowski]

Joke: Now its time to someone help them with some coupon like the ones they gives us that are almost useless because of the strict rules.

 

😛

 

 

New album soon!

[url]https://linktr.ee/patrickwichrowski[/url]

22

[LinkedMusicians]

It is possible that Dr. Martini could sell off the crown jewel of NI. It would raise money. Now, just imagining that and potential buyers in the industry — and not an investment group — what are other players you would be interested in it going to? This is my hot take on potential places Kontakt could land if Martini decides to sell it off. (NI management doesn’t get to decide this with the German insolvency process.) Now this is pure speculation. Martini might be able to make enough from selling off other parts of the company from recent acquisitions so that he doesn’t have to sell the crown jewel. But let’s imagine that he sells Kontakt and it goes to a player in the industry. Which one do you think would make the most sense and where would you like to see it land and why?

COMPANIES WHERE KONTAKT MIGHT BE A GOOD FIT AND I WOULD  BE HAPPY TO SEE IT LAND

Fender – Kontakt may be a good fit for Kontakt with their software focus and pro DAW (Fender Studio Pro). I’d be good with this. Fender is certainly large enough to afford it.

Arturia – Kontakt could be a good fit. I own a number of Arturia plugins and preset banks and have had a good customer experience. I would be good with them owning Kontakt.

Yamaha – As they already own Steinberg, buying Kontakt would absorb their biggest rival and consolidate the market.

Universal Audio – I know some confidential things about UA’s own attempts with their sampler and I really respect the ethics of how they worked with partners. I own a lot of UA plugins and feel good about the company and they would likely maintain the perpetual license model. However, Universal Audio is a mid-size company and may not be able to afford Kontakt or want to take on the debt necessary to purchase it in the current economic environment.

Roland – With their shift towards software/hardware integration, Kontakt might make sense.

Ablleton – They don’t have a history of large acquisitions, but it might make sense.

COMPANIES I WOULD NOT WANT TO SEE OWN KONTAKT

Apple – I sure hope not. It would guarantee the subscription-only model for Kontakt was in the near future.

InMusic – They usually only buy dying brands and don’t invest enough to keep software state of the art. They have a terrible track record with their software acquisitions. My guess is that they don’t make acquisitions that would cost as much as they would need to shell out for this one.

BandLab – It would practically guarantee that Kontakt would go subscription-only. BandLab’s mismanagement of Cakewalk / Sonar is another reason for concern. I really don’t see Cakewalk Sonar having a very long life. However, even if Sonar is killed off in a year or so, Kontakt could make sense to help gain BandLab greater access into the pro market, which they clearly are interested in, but have so far not shown any skills in entering. Sonar is a less-than-halfhearted entry. It isn’t competitive. It’s ignored by influencers, developers, and magazine publishers. There could not be more signs that it’s a product failure. I suspect that in a year, either  BandLab will incorporate more Sonar features into NEXT or acquire a successful DAW with a solid user base.

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2

[lamia6]

Image Line would be another candidate, maybe? Their CEO is the former CEO of NI (Constantin Koehncke).

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4

[LinkedMusicians]

On lamia6 said

Image Line would be another candidate, maybe? Their CEO is the former CEO of NI (Constantin Koehncke).

Excellent point.

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[Xandre]

On lamia6 said

Image Line would be another candidate, maybe? Their CEO is the former CEO of NI (Constantin Koehncke).

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Wouldn’t they go into competition with themselves if they bought NI, or even just Kontakt + NKS? They already own UVI.

Maybe they will split off their DJ Branch and keep Kontakt / Machine. Not sure who would be candidates for that part though.

1

[LinkedMusicians]

Kontakt sample developer Ocean Swift has made a statement about the NI situation.

The transition to a sales promotion is a bit odd, but I would cut small, indie developers like them some slack. These are often one to a few people operations where the same person writing website copy is also creating sample libraries:

Native Instruments – preliminary insolvency

What This Means For Ocean Swift

Hello ocean drifters,

By now most of you must have heard the news that Native Instruments has entered preliminary insolvency.  Our friends at APD have a good article on the topic.

We are assessing the situation, getting in touch with our sources at NI, discussing plans and figuring out possible next steps.  Business wise, what is for certain is that a big hit is coming our way in the short term. There is a beautiful flagship NKS instrument in the style of Absynth from us, waiting in the wings scheduled for a February 12 release. It is unclear to us if it is happening from NI’s side, or if we even want it to happen considering the situation from our side.

What this means for you as of now:

All the NI related content is for now as usual, Native Access works as usual and you can download and activate.
Our presets business goes on as usual, there are amazing things for some of our favorite synth coming soon.
Our commitment to NKS continues, upcoming preset packs will be NKS compatible.
If it comes to that, we will come up with a plan to at least move our instruments to Kontakt full, as a last resort.

Boutique companies like Ocean Swift whose business has a strong dependency to Native Instruments are extremely vulnerable right now, and this thing can have a profound domino effect.

We need your support now more than ever.

We have created a mailing list only coupon that will grant you 50% off everything on site excluding only on-sale items.

Simply use OSMAYA at checkout to apply the discount to your entire cart. Valid until February 16.

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1

[lamia6]

Unlikely but interesting: IK Multimedia could buy Kontakt to replace SampleTank. (purely a thought only)

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1

[MagicRuss]

The other one nobody has mentioned that I want to stay as far away from NI is Music Tribe, for the obvious reason that it is run by Uli Behringer.

Also surprised nobody put Gibson on the no no list either.

I also am against UAD because I don’t want to use iLok.

• This reply was modified 1 month, 4 weeks ago by MagicRuss.

[LinkedMusicians]

On lamia6 said

Unlikely but interesting: IK Multimedia could buy Kontakt to replace SampleTank. (purely a thought only)

IK is a possibility. I didn’t mention them purely because of their company size being on the smaller side. But from customer and strategic perspectives, I think that IK could be a good place for Kontakt to land. While IK doesn’t have a product with the kind of ecosystem Kontakt has (thousands of developers who create sample libraries for the platform), they have been in the space for a long time (I think I bought SampleTank before I purchased Kontakt back in the early 00s) and they have proven themselves as a serious player in the space. They’ve also proven themselves to be a good company from a customer support standpoint (yes, they’ve had their hiccups, but they’ve been committed to good customer support).

If Kontakt ended up with IK, I would be fine with that.With IK’s Pianoverse, the company proved that they could create a state of the art, detailed sample-based platform on par with Kontakt from a quality perspective, and their MODO instrument lines using physical modeling are also very impressive.

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1

[LinkedMusicians]

I created a thread dedicated to Native Instruments insolvency and related updates in the Gear Discussion forum that I’m going to keep pinned across all of the forums throughout this process. I think NI is such a significant player to music producers that it’s important to keep everyone updated. So let’s centralize information and maintain it in that thread. There was a statement today by Plugin Alliance that they are not currently involved in the ongoing insolvency proceedings.

Native Instruments Insolvency and Updates Thread 

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1

[LinkedMusicians]

There is so much misunderstanding and misinformation on this situation right now. Some folks think this means Native Instruments is shutting down; it doesn’t. Others are calling this a rebranding. That’s fantastically wrong. This has nothing to do with rebranding or marketing. This is fiscal and an incredibly serious situation. Native Instruments could not continue operating, paying its bills, so they have been taken over by an insolvency administrator who will be assessing all of NI’s assets and determining the best forward, exploring options such as finding investors, selling off business units, selling off product lines/brands, etc.

At a minimum, it’s essential to understand that the purpose of a preliminary insolvency is to save the company, not to shut it down. That is the responsibility of the insolvency administrator, to attempt to save the company.

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1

[Xandre]

On MagicRuss said

The other one nobody has mentioned that I want to stay as far away from NI is Music Tribe, for the obvious reason that it is run by Uli Behringer.

Also surprised nobody put Gibson on the no no list either.

I also am against UAD because I don’t want to use iLok.

Well the difference between  Music Tribe buying NI or Gibson, is that Music Tribe would sell new hardware for half the price, whilst Gibson would sell it for five times the current price. The quality would be about the same I guess .. 😂

1

[joegyork]

Fascinating discussion here and on other threads – a worrying time. Thanks particularly to Peter for his insights from someone who has been involved in the industry. Let us keep our fingers crossed!

1

[LinkedMusicians]

As I had some downtime today due to being under the weather and decided to write a serious post on this topic to help our community — and developers — better understand what’s going on with NI and navigate through some of the misinformation and just plain bad ideas I’ve seen posted in social media and forums about the situation.

Understanding Native Instruments’ Preliminary Insolvency and Potential Scenarios

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[Author]

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