Native Instruments Insolvency and Updates

[LinkedMusicians]

Considering the importance of Native Instruments to this industry, I thought it would be valuable to keep a thread dedicated to following developments related to the company’s preliminary insolvency.

SUMMARY AKA TL; DR

Native Instruments GmbH has officially entered preliminary insolvency proceedings in Germany as of  January 27, 2026. This is a legal “protective phase” intended to stabilize the company’s finances and evaluate its future, rather than an immediate shutdown. The closest equivalent to it in the US is a Chapter 11 bankruptcy. The purpose of a preliminary insolvency is to attempt to maximize the value of the company for creditors, basically. The German process uses government money to pay employees for 3 months, so their jobs are protected during that period.

Current Status and Impact of Native Instruments’ Insolvency

Operational Control: A court-appointed administrator, Prof. Dr. Torsten Martini, is now overseeing the company’s assets and restructuring. Management remains in place but with restricted authority.

User Experience: For now, it is “business as usual” for customers. Software licenses remain valid, and Native Access servers are expected to stay online during the proceedings.

Plugin Alliance Status: A spokesperson for Plugin Alliance clarified that their entities (in Germany and the US) are not part of the insolvency filing and continue to operate normally.

Ownership Context: The company has been under the majority stake of private equity firm Francisco Partners since 2021. Reports suggest the insolvency may stem from massive debt incurred during recent high-cost acquisitions (like iZotope and Brainworx) under the former “Soundwide” umbrella.

Possible Outcomes

The administrator has roughly 6–12 weeks to recommend a path forward. Scenarios include:

Restructuring: Cutting debt and unprofitable divisions to emerge as a leaner company.

Outright Acquisition: There were talks of a potential acquisition of Native Instruments by Bridgepoint and Bain Capital Credit in late 2025, but it appears that the deal fell through.

Asset Sale: Selling off individual business units (e.g., Kontakt, Traktor, or Maschine) to separate buyers.

NOTICE: I am not an attorney. This information is for educational purposes, based on the recent news about Native Instruments and does not constitute legal advice.

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7

[LinkedMusicians]

Mo Volans, General Manager – Plugin Alliance & Brainworx at Plugin Alliance, stated in the Plugin Alliance Audiophiles group on Facebook on January 28, 2026:

“I will tell you what we have told our partners…

The key points:
As of today, Plugin Alliance entities are not part of the insolvency filing. Our operations in Langenfeld and the US remain outside these proceedings.

For now – It’s business as usual. We continue to operate normally – product releases, support, installers and all other activities continue unchanged.
We’ll share further updates as the situation develops.

I hope this helps – we remain dedicated to our partners and customers!”

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6

[LinkedMusicians]

I anticipate that Native Instruments will be issuing a public statement within the next 48 hours to calm customers, vendors, developers, and channel partners. That statement will help us to understand what NI will be doing to ensure continuity. That is, that the business will continue operation, that the activation servers will continue to operate, that customer support will continue operation, etc.

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4

[mira]

thank you so much dear Peter for recent info about this sad situation, nice to read that PA is out of problems… and will work and it isnt part of this …

 

have a nice evening

1

[Xandre]

Nothing from Izotope yet? Were they integrated into NI in a different way than Plugin Alliance, so that they might be impacted?

[LinkedMusicians]

On mira said

thank you so much dear Peter for recent info about this sad situation, nice to read that PA is out of problems… and will work and it isnt part of this …

 

have a nice evening

That doesn’t mean that there won’t be a bankruptcy filing for it in another country. I would expect that there will be a bankrupcty filling for it. Native Instruments has a massive amount of debt compared to its annual revenue. The insolvency administrator is going to need to look at every option. According to CDM, NI’s 2023 filings, they had £250 million in debt with revenue of around $25 million (EBITDA – Earnings before interest, taxes, depreciation, and amortization). They’re going to need a way to pay off that debt and that will mean that every part of the company that has value could be up for sale. But also understand that the administrator could find investors who want to continue NI. There are many potential scenarios, but with so much debt compared to their liquid assets, it seems virtually certain that the administrator will be selling off the most valuable assets in order to raise as much cash as possible. We don’t know a great deal at the moment, but from what we do know, Native Instruments was very poorly managed and got in far over its head on acquisitions. It has long been known in the industry that the company was in trouble, but the facts that have come to light show very poor judgment by management. I really can’t stress that enough.

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3

[LinkedMusicians]

Germany’s insolvency process moves much more quickly than the US chapter 11 bankruptcy process. That means that the administrator needs to raise cash to pay of debts more quickly. My estimation — and this is a hot take — based on that and what CDM reported (with the assumption that it is accurate, which we cannot verify) that, as of 2023, NI’s debt was around 10x its revenue — is that it substantially raises the likelihood of NI’s crown jewel (most valuable asset), Kontakt, being sold to another company. I wouldn’t be worried about Kontakt ceasing to exist —  it’s worth far too much money and will raise more capital than any other product/subbrand that NI owns — so with such significant debt, it’s very likely that the administrator will decide to sell it off.

As far as recent acquisitions, we really don’t know enough about the mindset of the administrator, but I would imagine that he could view recent acquisitions that weren’t successfully integrated as easy choices to sell off and raise cash. He’s trying to ensure the continued operation of NI, the acquisitions were clearly not a success, but a significant part of what led to NI’s insolvency.  Imagine if Dirk Ulrich ended up buying back his former company for a lot less than he was paid for it. As a Plugin Alliance and Brainworx customer, I would be very good with that situation.

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[SoulfulKeys]

On LinkedMusicians said

Germany’s insolvency process moves much more quickly than the US chapter 11 bankruptcy process. That means that the administrator needs to raise cash to pay of debts more quickly. My estimation — and this is a hot take — based on that and the fact that, as of 2023, NI’s debt was around 10x its revenue — is that it substantially raises the likelihood of NI’s crown jewel (most valuable asset), Kontakt, being sold to another company. I wouldn’t be worried about Kontakt ceasing to exist —  it’s worth far too much money and will raise more capital than any other product/subbrand that NI owns — so with such significant debt, it’s very likely that the administrator will decide to sell it off.

As far as recent acquisitions, we really don’t know enough about the mindset of the administrator, but I would imagine that he could view recent acquisitions that weren’t successfully integrated as easy choices to sell off and raise cash. He’s trying to ensure the continued operation of NI, the acquisitions were clearly not a success, but a significant part of what led to NI’s insolvency.  Imagine if Dirk Ulrich ended up buying back his former company for a lot less than he was paid for it. As a Plugin Alliance and Brainworx customer, I would be very good with that situation.

The official LinkedMusicians account

If they sell all of that off could you see NI making any kind of comeback? What is NI without Kontakt?

[LinkedMusicians]

On SoulfulKeys said

If they sell all of that off could you see NI making any kind of comeback? What is NI without Kontakt?

I agree with your sentiment. As anyone who uses this site can see, I am a huge Kontakt user and fan. I own the latest Komplete 15 Ultimate. I would estimate that 90% of my sample library purchases are for Kontakt sample libraries. So, I would LOVE if the administrator were able to find a way to keep Kontakt in the hands of NI — obviously not with the same top execs that got the company into the dire circumstances they’re now in, but the same development team for Kontakt. I’ve also had a couple of Kontakt developers privately asking me my thoughts on this. They are — rightfully — very concerned. There’s more that I cannot say that I know NI is doing.

The reality is, NI has a government-appointed insolvency administrator trying to figure out how to salvage a company that — as of 2023, had debt-to-earnings ratio of roughly 12.7 to 1.  Their annual sales in 2024 was $25 million and they owed $318 million (that’s all in USD).  In corporate finance, a ratio above 4x or 5x is typically considered high-risk; at nearly 13x, the company was heavily over-leveraged, meaning it was carrying nearly 13 times more debt than it earned in a single year.

So you have an administrator who is tasked with paying creditors and salvaging NI. Because of the enormity of the debt, I don’t think it’s realistic that NI can simply continue business as usual. If Native Instruments were forced into a total liquidation today, it would raise significantly less than its total debt of $318 million. I’m not a finance expert, I just have experience as a strategy director (my background is mostly marketing management, but I took a strategy role for a time, with a strong focus on technology and digital) and doing analysis on potential acquisitions of mostly very large companies. But there is clearly no way to raise the cash needed to pay off that level of debt even if all of NI were liquidated; that would raise significantly less than the debt owed. Creditors won’t want a total fire sale, as they realize that they will likely get more of the money owed to them back by seeing NI continue to operate. One thing is certain though: this is a very serious time for NI, its customers, and every company that works with NI. Anything could happen to Kontakt. But I seriously doubt that NI’s crown jewel would be discontinued. That’s very unlikely. Kontakt is the one asset that I feel very confident will survive. It’s an extremely successful product. So for those focused on the future of Kontakt, it’s really just a matter of where Kontakt will land, whether it will stay with NI or be sold off. As for other NI subrands, especially smaller ones, I think the future is far less certain.

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3

[MagicRuss]

It seems that DJ who wears a mouse helmet on stage posted on Twitter that he was talking to the insolvency team to try to get control of Traktor and other assets.  My account there is inactive so I can’t repost.

• This reply was modified 1 month, 3 weeks ago by MagicRuss.

[Kirean]

Apparently Plugin Alliance posted this on some Facebook page:

“As of today, Plugin Alliance entities are not part of the insolvency filing. Our operations in Langenfeld and the US remain outside these proceedings. For now – It’s business as usual. We continue to operate normally – product releases, support, installers and all other activities continue unchanged. We’ll share further updates as the situation develops. I hope this helps – we remain dedicated to our partners and customers!”

I don’t like online activations, I don’t like DRM. I like owning things I buy. Yet, despite all that, I thought that spending on Kontakt libraries would be relatively safe as far as longevity goes, considering how big of a player it is in the field. Little did I know and could end up losing quite a bit of quarters if it isn’t sorted out.

Anyway. All of this is way beyond my paygrade and I’d be only adding to the noise speculating about where they end up. Hope they end up in a place where everyone will feel relatively safe with their investment going forward.

In other news, I’ve already cut my spending on music stuff in the past month or two to almost zero and going forward, with this looming around, doubt that’s gonna change. Especially when there’s so much open hostility towards the customer base that it almost feels unreal at times. Developers charging for minor updates and stability fixes etc, a lot of things going unpatched despite obvious problems/bugs, launchers filling your computer with unneeded services and rootkits… There’s simply a lot of unnecessary steps and bloat to getting to play a synth or making your vocals sound less crap.

It never seizes to amaze how people willing to pay for a product are almost always getting a worse experience than those that obtain things illegally. I had my doubts about Steam when Valve released it with Half-Life 2, but in ~22 years they’ve built a platform for computer games that takes customer experience and especially convenience into account and have become one of the biggest players in the entertainment industry. What they’re also doing with Linux support for example has been nothing but absolutely amazing. Yet, their success seems like rocket science to everyone else, when at the core, it simply boils down to “trust”.

With that said. If something interesting comes up and the developers don’t treat the buying customer like filth (and offer me ways to secure my investment to them), I’m more inclined to spare my coins.

Anyway. I digress. Carry on. Hope all the future updates will be positive ones.

3

[LinkedMusicians]

I just published a LinkedMusicians blog post on the Native Instruments preliminary insolvency.

My intent is to provide an accurate, simple, clear, and concise post that explains a complex situation for everyone, regardless of their depth of understanding of finance and business. My hope is that providing clarity on this situation will help our community more easily understand the situation and navigate through the misinformation and unknowledgeable opinions that are presently floating around social media and forums in this space. I put as much effort into the post as I would a professional article, because this is so important for users — including me — and developers, some of whom have asked for my insights on the situation. While NI staff is already beginning to communicate with their partners, what employees know at this time is very basic as the insolvency administrator needs to perform an analysis and make decisions from there, which are dependent on numerous external factors.

Understanding Native Instruments’ Preliminary Insolvency and Potential Scenarios

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4

[Brian]

I have seen recommendations in a few forums to keep a list of your registered software products that involve NI.  It’s easy enough, so why not keep a copy.

I only use Windows, so no idea about other platforms.

If you run Native Access and select SUPPORT from the bottom left, then click “Create a Support File”, a ZIP file will be dropped in your public documents folder that contains TXT files showing everything installed on your system by NI and Izotope, including (as far as I can tell) all third party Kontakt libraries.  I also can find about EVERY VST I have listed there, probably because I have used Kontrol.

You can also log in to NI web site and your account to see your “My Products” page.  It’s just a list of titles, but you can grab the whole list (at least on Edge or Brave) by clicking in the window and tapping CTRL-S, which will make a full html file of the window- so no need to scroll and grab by pages.

 

51

[swijaya]

On Kirean said

 

It never seizes to amaze how people willing to pay for a product are almost always getting a worse experience than those that obtain things illegally

I have 2 products (worth more than 600 USD) from a big company (it even was mentioned in the older thread as one of the big enough companies able to bail NI out), and has “incompatibility issue” (my own term) with their software protection (they share the system): somehow their periodic license check force-closes those products. Support can’t figure out what’s the problem (we have gone through the usual routine: antivirus check, .dmp files submission, everything up to Windows reinstall, which I won’t do).

So I have to make do with frequent saves & short sessions.

Imagine if that incompatible portion was eliminated.

1

[LinkedMusicians]

It just struck me. I need to update the blog post. I posted about the general manager of Plugin Alliance posting that the preliminary insolvency doesn’t currently apply to Plugin Alliance, but to be very candid, his statement was a bit misleading. He was communicating that it’s business as usual — he literally stated that — but the reality is, Plugin Alliance could still be forced to file for bankruptcy protection independently in their own countries of operation—such as under Chapter 11 in the United States—to manage their own liabilities. Every Native Instruments subsidiary is governed by the insolvency/bankruptcy laws of the country where it is incorporated. That actually could be a negative for customers, employees, and supply chain partners, not a positive. His spin was clearly to make customers and new customers feel safe during this time, but he was leading people to a sense of security that was less than accurate. He wasn’t sharing a full picture, and deliberately left out things to make it appear that Plugin Alliance could be safe from insolvency/bankruptcy proceedings. I don’t think that was the right thing to do.

He was only focused on making customers feel that things were normal, “business as usual.” He did caveat that phrase with “for now,” but I found it to be downplaying and leaving out very basic facts he knew that aren’t so favorable and instead playing things off as a positive. I seriously doubt that his statement was ran past a competent and ethical attorney before posting.

I understand very well the need to comfort customers and partners in this time, however, I don’t think that his statement was appropriate, as it would clearly lead most customers into a false sense of security that Plugin Alliance is going to avoid impacts from the insolvency. Plugin Alliance is a part of Native Instruments, and if Native Instruments is in preliminary insolvency with debt substantially larger than they can afford to pay, every holding of NI is going to be in play and anyone communicating with customers should not be trying to create a perception that is not the case.

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2

[joegyork]

On Brian said

I have seen recommendations in a few forums to keep a list of your registered software products that involve NI.  It’s easy enough, so why not keep a copy.

I only use Windows, so no idea about other platforms.

If you run Native Access and select SUPPORT from the bottom left, then click “Create a Support File”, a ZIP file will be dropped in your public documents folder that contains TXT files showing everything installed on your system by NI and Izotope, including (as far as I can tell) all third party Kontakt libraries.  I also can find about EVERY VST I have listed there, probably because I have used Kontrol.

You can also log in to NI web site and your account to see your “My Products” page.  It’s just a list of titles, but you can grab the whole list (at least on Edge or Brave) by clicking in the window and tapping CTRL-S, which will make a full html file of the window- so no need to scroll and grab by pages.

 

Thanks for this info @Brian I have done just that!

2

[Xandre]

There is a statement from NI, but it’s not really saying anything substantial:

 

https://blog.native-instruments.com/statement-from-nick-williams-ceo-of-native-instruments/

 

I want to personally take a moment to address the recent news about Native Instruments.

Please rest assured that business continues as usual at Native Instruments, iZotope, Plugin Alliance and Brainworx. Our hardware and software products remain on sale and available for download and activation. Our passionate and dedicated teams are here and supporting customers as normal. In product and engineering, we are continuing to develop and launch new products and features. Our NKS Partnerships team continues to process Kontakt Player licences and NKS Partner submissions.

We are working diligently and responsibly to secure a healthy, financially sustainable future for Native Instruments. As you may have seen, Native Instruments GmbH has entered a restructuring process in Germany, as have 3 of our German non-operating holding companies. In legal terms, we have filed applications to open pre-insolvency proceedings for those companies.

We are focused on providing continuity for creators, customers, and partners. We’ll continue to share updates as we have them.

I’m a lifelong musician myself, and have been a passionate fan of Native Instruments for 25 years. Our mission to inspire and enable creators to express themselves through sound continues.

2

[LinkedMusicians]

Native Instruments’ CEO statement is pretty standard stuff for a company in this situation. Of course, his job right now — and his position is very limited, as the preliminary insolvency administrator is now in charge of things — is day-to-day operations under the supervision of the preliminary insolvency administrator is going to want him to communicate to customers, to partners, and employees some sense of normalcy, which is what that statement is about. I think the general manager of Plugin Alliance’s statement was one that, although accurate, withheld crucial facts to paint a picture that the Plugin Alliance might be able to make it through all of this without being impacted. Maybe he didn’t even write that statement himself, but I don’t think it was the right thing to do. According to the CDM info — and I know how to access the German legal documents, I just can’t read German and wouldn’t spend the time with Google Translate to sift through all of those pages for our purposes — the debt-to-earnings ratio of NI in 2023 was more than 12-to-1. I don’t think it’s realistic to insinuate that Plugin Alliance could come out of this untouched. That’s just not reality and creating that perception — which I believe his statement was attempting to do in order to make customers feel that it’s business as usual for PA — just isn’t honest IMO. The task is to comfort customers, but I think the PA GM’s statement went in the direction of misleading whereas NI’s CEO statement is honest and does the basics of explaining that they are operating normally at this time.

As I mentioned earlier, NI is operating normally at this time, in part due to Germany’s preliminary insolvency laws and protections for employees. If this were the US and using US bankruptcy laws, there aren’t the same protections for employees (that’s the reason that corporations invest so much in politics in the US — it buys them influence and legislation written that prefers them over employees and harmed consumers). The company could have fired all of its employees if this were a US Chapter 11 bankruptcy. In fact, that is still possible for NI companies headquartered in the US or other countries, like Plugin Alliance. German law protects employees for 3 months, with the government guaranteeing their salary. The US doesn’t protect them at all. A company can fire any of its employees after declaring a US Chapt 11 bankruptcy, so employees of US-based corporations owned by NI should be significantly more concerned about immediate impacts to their employment than those based in Germany. Granted, all NI employees should be very concerned, but Plugin Alliance employees should be the most concerned, because they’re far more vulnerable.

And I should caveat this with the statement that I am not a lawyer and am not giving legal advice.

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2

[LinkedMusicians]

It will be interesting to see how this plays out, but I posted in the Plugin Alliance Audiophiles group that head of Plugin Alliance (Mo Valens) and various top execs at NI are in to address Mo Valens “business as usual” statement that I wrote about earlier. Here is my post in its entirety:

Mo Volans First, my heart goes out to all NI employees. I understand that you’re trying to assure us customers will have continuity, but your statement may lead some to wrongly conclude that Plugin Alliance won’t be affected by the preliminary insolvency. Considering the very high level of debt to revenue that NI is reported to have, it seems extremely likely that Plugin Alliance will be impacted and it doesn’t mean that:
1. Plugin Alliance is protected from bankruptcy under its own jurisdiction. A US bankruptcy doesn’t provide the protections a German insolvency does to employees (specifically, the German gov’t guarantees employees 3 months of salary).
2. Plugin Alliance is financially insulated.
3. Plugin Alliance cannot be sold.
4. Plugin Alliance cannot be affected by the parent’s insolvency.

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[LinkedMusicians]

Following NI, legal, forum, and social media posts, it really blows me away — but I suppose it doesn’t surprise me — how many people profess to understand this situation when that couldn’t be further from the truth. If anyone is writing that this is no big deal, that NI will be fine, they don’t know what they’re talking about. NI is no longer in control of the business; an insolvency administrator from an insolvency law firm is in control of the business, NI staff is only keeping the business operating during this time. They don’t make strategic decisions anymore.

With regard to those who assert that Native Instruments is going out of business, they also don’t know what they’re talking about. I seriously doubt that this will result in NI going out of business. It could, but the reason that’s unlikely is that the administrator is acting in the interest of Native Instruments’ creditors, and a fire sale would leave them with the absolutely lowest rate of recovery. From the information we have on NI’s debt and earnings, the debt is far beyond the company’s earnings or worth. Consequently, investors are going to look to get back as much of their money as they can, that is why I suspect the most likely outcome is selling off the recently acquired companies like iZotope, Brainworx, and Plugin Alliance — and anything that is of value that NI has delved into that isn’t part of their core business / core competency that may be attractive to other companies, like their Traktor DJ products.

Something I didn’t spend time writing about, but I find very interesting, and in my wheelhouse, and incredibly important if you want to understand what led to the current situation, is the period of NI acquisitions. NI did a number of acquistiions from around 2021 -2023. 2023 was the year that major disruption occurred in the digital audio production world with plugins. Consider one long-established player in the digital audio production world (and physical audio gear, as well, of course), United Audio.

UA began dramatically reducing plugin prices in 2023. United Audio plugins that had been selling for $149–$299 were suddenly being frequently discounted to $29 or $39. So, NI was making their acquisitions just prior and in the midst of disruption in the effects plugin and sample library industries. Both of those events dramatically impact the worth of those acquisitions and the profitability of NI’s core business. NI itself had started discounting at deeper levels than it had before. I recall a few sample library developers — one of them pretty large — discussing NI ‘s new deep discounting practices with surprise.

So just imagine, NI, a small company — granted, the majority owner is a large company, but NI itself is a small company — goes on an acquisition binge just before and during a huge price disruption in the industry, so the high profit margins that were the norm when their buying spree began was no longer reality by the time they made their acquisitions. The company was saddled with massive debt compared to its earnings and value, and with the pricing disruption, there’s no easy way to start making profits big enough to cover all of that debt. The ones who made out here are the ones that sold to NI. Dirk Ulrich sold at a great time and I’m sure that he could buy his former companies back for a fraction of what he sold them for. As a customer, I would consider that an excellent outcome. Dirk founded those companies, and from everything I know, he seemed to do an excellent job of growing them.

I think the best of all scenarios is that NI goes back to only focusing on Kontakt and related products. It built an excellent and innovative ecosystem of developers that is unmatched. NI never had anything else that equaled what it accomplished with Kontakt and the Kontakt ecosystem. As a customer — and I use Kontakt more than another instrument plugin — I want the same people who developed and managed it to keep managing it. NI’s insolvency isn’t their fault. It’s the fault of senior management.

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2

[Brian]

I wonder if any comparisons can be drawn from the Magix insolvency that I believe was filed two years ago?  I am not interested enough to dig, and I would be reliant on translation as I don’t speak a word of German.  I did find the following recent press release regarding Magix that you can translate via browser.  I think they are small potatoes compared to NI, but they appear to still be selling and updating software products.

 

https://www.indat.info/Meldungen/Pressemitteilungen-Insolvenz-Sanierung/Erfolgreiche-Sanierung-der-Magix-Software-GmbH-d6579054b839094a54bbe5fa85d1eed8

[Xandre]

Didn’t Magix have to sell off their Samplitude and Seqoia to Boris FX? Not sure about all of their other brands like Vegas and Soundforge.

Not sure which parts NI would sell off to get back to their ‘core’ business.

1

[fossile]

hmmm, so they’re saying that non-productive holding/shell companies, indiscriminately buying popular companies using leveraged corporate debt instruments, results in unsustainable debt which cannot be repaid to the shareholders? lol, go figure…

3

[LinkedMusicians]

On Brian said

I wonder if any comparisons can be drawn from the Magix insolvency that I believe was filed two years ago?  I am not interested enough to dig, and I would be reliant on translation as I don’t speak a word of German.  I did find the following recent press release regarding Magix that you can translate via browser.  I think they are small potatoes compared to NI, but they appear to still be selling and updating software products.

 

https://www.indat.info/Meldungen/Pressemitteilungen-Insolvenz-Sanierung/Erfolgreiche-Sanierung-der-Magix-Software-GmbH-d6579054b839094a54bbe5fa85d1eed8

I’m not as familiar with the circumstances around Magix insolvency, but I don’t believe that Magix insolvency was a result of a bunch of acquisitions and the enormous debt accumulated, but was more about their existing product lines and market choices. I believe that my explanation of the acquisitions, the irresponsible debt that NI accumulated, and the pricing disruptions in the audio production plugin and sample library industries combined to create a series of problems that NI couldn’t overcome. With the level of debt that NI accumulated, even without the pricing disruption that occurred, starting around 2023 — just after their acquisition spree — I think that NI would have been in trouble. We’re looking at a company that brought in (in 2023) $25 million in revenue with far more than $300 million in debt. That just seems irresponsible. There’s no way to justify that. If I was in my capacity as strategy director assessing whether to buy this company, I would write a more professional version of, only buy parts of this company, by all means DO NOT take on the executive team. No responsible exec would put a company in this financial position. It’s kind to say that they were overleveraged. This enormous debt is what makes things so very uncertain for NI’s future.

There’s no way to bail out a company that brings in $25 million a year with debt of more than $300 million. What is guiding everything is credtiors desire to get as much of their money back. They could decide that the best method is to dissolve NI completely, to sell it for parts. But the big thing that makes that less likely is that it won’t bring them the most money. Their best hope of getting more of their money back — and they aren’t going to get much of it back no matter which path they take — is to keep part of NI together that can still make a profit, and I think the best hope for any part of NI to make a profit — and this is definitely based on assumptions, not looking at their financials — is by cutting down what NI operates to their core product, Kontakt, and the ecosystem around that.

I seriously doubt that Magix had anywhere near the level of debt that NI has. That company survived and was later bought. The analysis I’ve seen of why Magix insolvency occurred was a complex product portfolio, failed, slow adjustment of cost structures, and rising interest rates not an astounding amount of debt vs. earnings (because Magix, like NI is private, we don’t know their EBITDA ratio; we only know NI’s because of some documents made public after a failed acquisition).

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2

[anxiousmofo]

The upcoming Koda Sampler looks like it could be a major competitor to Kontakt with fantastically awful timing for NI and any assumed ongoing market dominance by Kontakt and related financial maneuvering.  I was quite impressed by the Koda NAMM presentation videos, at least.

Tangled roots perplex her ways.

1

[LinkedMusicians]

On anxiousmofo said

The upcoming Koda Sampler looks like it could be a major competitor to Kontakt with fantastically awful timing for NI and any assumed ongoing market dominance by Kontakt and related financial maneuvering.  I was quite impressed by the Koda NAMM presentation videos, at least.

@anxiousmofo, feel free to create a thread about it. In fact, I’d personally very much enjoy that. I’m interested.

As you can easily see, I’m a huge fan of Kontakt, but I would LOVE to see a great competitor that can do everything Kontakt can do and more. I mean, everyone here is aware that I’ve advised 8Dio regarding their SoundPaint division. I’ve had many conversations with sample and plugin instrument developers over the years (decades at this point), and the reasons for Kontakt’s dominance, beyond its user base size, are greatly due to it being an excellent and highly developed sampler that allows for complex scripting in what I’m told (because I’m not a developer, of course, I’m subject to taking the advice of experts) in a more efficient manner than competitors like UVI (as UVI has often been the big alternative and I’ve discussed this with developers who’ve switched to UVI, like AcousticSamples).

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1

[LinkedMusicians]

I just wanted to update this to address a question that I see comes up — or is misunderstood — about the preliminary insolvency process. First, this process is about a court-appointed administrator overseeing an analysis of the company to determine what is the best course of action to maximize what creditors can recover from NI; the administrator is trying to preserve as much value as possible for creditors — that’s the objective of the role. German laws provide for a three-month guarantee of salaries for company employees — although that doesn’t apply to employees in divisions of NI incorporated in other jurisdictions, like Plugin Alliance.  Employees of those companies can face termination on the day bankruptcy is filed.

The preliminary insolvency process can take between several weeks and a few months. At that point, the administrator will determine if NI should be restructured, refinanced, or sold as a going concern. Of course, those decisions won’t be made in a vacuum; the market appetite to buy NI as a whole or parts of the company are a major factor. So, for example, within the next few months, we could find that they’re in negotiations to sell all or parts of NI. One thing I’m very confident of is that the administrator will not decide to keep the company as is. That’s extremely unlikely, as NI wouldn’t be in the current state of overwhelming debt if that were a serious possibility.

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4

[LinkedMusicians]

Native Instruments Co-Founder and Former CEO, Daniel Haver, released a statement on LinkedIn. This is that message in its entirety:

 

My thoughts first and foremost are with NI’s employees. Many of you have spent years working with incredible passion, creativity, and perseverance on something that truly matters to musicians all around the world.

At the same time, I am thinking of the millions of users worldwide for whom Native Instruments is far more than just a software or hardware manufacturer. For many, NI has been — and continues to be — a constant companion and a creator of iconic producer and DJ tools that fuel inspiration and creativity in music. I sincerely hope that this trust and connection will endure through this difficult period.

As a co-founder and long-time CEO, I had the privilege of building and leading the company from 1997 to 2020. At the end of 2020, I handed over operational responsibility and stepped back from day-to-day management. At that time, following a necessary and at times painful restructuring, the company was experiencing strong growth momentum with record revenues and results. In the years since, I have followed NI’s development only from a distance, as an observer. That makes the current developments all the more surprising to me as well.

Despite everything, I remain convinced that NI’s true substance lies not only in its balance sheets, but in its technology, its remarkably broad product portfolio, and its flagship products such as Traktor, Kontakt, Reaktor, and Maschine — as well as in its unique brand. Above all, it lies in the people and the community behind it. Insolvency proceedings do not necessarily mean the end; they can also represent an opportunity for realignment and renewed strength.

I wish everyone involved strength, clarity, and sound judgment for the steps ahead. And I sincerely hope that Native Instruments will find a way to emerge from this phase stronger — for the sake of its employees, its users, and the idea with which it all began.

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2

[LinkedMusicians]

I came across this video from a former iZotope / Native Instruments employee that I found very moving. The guy, Geoff Manchester, admits that he’s not knowledgeable on financial matters — he stated that he had to google the definition of insolvency when he got the news about NI. What I find so compelling about his story — and he’s an excellent communicator — is that he’s telling the human side of the business.

I’ve focused my posts about NI’s insolvency on educating people about insolvency and what that could mean for Native Instruments and Native Instruments customers. You can easily discern that I love Native Instruments products and I know that many of you do too. In fact, I use NI tools more than anything else digital to make music (specifically, Kontakt, but I also use iZotope and Plugin Alliance plugins; every song I share has been mastered with iZotope Ozone).

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21

[LinkedMusicians]

The more I think about this situation, the more it appears very likely that Plugin Alliance will be sold off. As someone who owns a lot of software from NI, iZotope, and Plugin Alliance, I am — realistically — very concerned about this situation.

Why do I feel more confident about Plugin Alliance being sold that any other part of NI?

Plugin Alliance is believed to be a lean, highly profitable software-only platform (as NI is not public, we really don’t know anything for certain). It seems to be firewalled from NI’s debt, which one would expect, could make it easier to sell it off. The court-appointed administrator in Germany is looking for a means to raise cash to pay back banks and investors. Selling Plugin Alliance would quickly bring in tens of millions of dollars in revenue (sorry for writing in terms of USDs, but it keeps things simple).

I just hope that (1) it’s sold to a really solid buyer that will continue to develop these plugins — I think selling Plugin Alliance back to Dirk Ulrich would be ideal for PA customers, and (2) that sale happens quickly.

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3

[LinkedMusicians]

When I was searching to see if there was any new developments regarding Native Instruments, I noticed some new articles written in blogs and publications in this space. I forget which publication it was — and I wouldn’t want to mention it by name anyhow — but the author stated his very confused concept of insolvency vs. bankruptcy, asserting (wrongly) that if Native Instruments goes out of business, they’ll enter bankruptcy, but now they’re just insolvent.

It’s one thing to tell your friends such nonsense, but publishing it? It’s the Dunning-Kruger Effect on display.

All it would take is a little reading from a trustworthy source to find that German insolvency laws and American bankruptcy laws are two different approaches to the same problem — not being able to pay your bills. The insolvency process in Germany is the equivalent to the American bankruptcy process and visa versa, with, obviously, variations. Clearly, the author of the post didn’t understand what either meant, or the different forms of bankruptcy in the US. and didn’t take the time to learn about insolvency or bankruptcy before writing that article.

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2

[Xandre]

Thinking about the mess that is the Diamond Comics bankruptcy process. Is there any money smaller sample library developers prepaid to NI that might be given to debtors as part of the current insolvency? For instance: do they pre-buy a number of serials to be used within Native Access so their libraries can be used with Kontakt Player? Or is their current risk that the Kontakt platform will die / the new owner will significantly increase the license cost to build Kontakt libraries.

[LinkedMusicians]

On Xandre said

Thinking about the mess that is the Diamond Comics bankruptcy process. Is there any money smaller sample library developers prepaid to NI that might be given to debtors as part of the current insolvency? For instance: do they pre-buy a number of serials to be used within Native Access so their libraries can be used with Kontakt Player? Or is their current risk that the Kontakt platform will die / the new owner will significantly increase the license cost to build Kontakt libraries.

From what we know — based on 2023 financial data that was published — the debt that NI owed at that time far exceeded the company’s revenue or its total value. I wrote about the numbers we know earlier. The annual revenue was a small fraction of the debt. So, it’s definitely not possible for getting some additional revenue from channel partners to be enough to cover that massive level of debt, even if they all paid 10 years in advance, it wouldn’t even approach how much debt is owed. Creditors don’t expect to recover all of that debt, that’s why the government had to take over. NI management put the company into massive debt. Creditors are trying to get back as much of that debt as possible and the administrator is trying to find a path to getting the creditors back as much of what they’re owed as possible. The administrator is really working on their behalf, not NI’s ownership, not NI customers, but the companies that NI owes far more money than they have.’

I wrote a more formal analysis and went through some likely potential outcomes from the insolvency in the LinkedMusicians blog, if you wanted to check it out. I tried to address the fundamental questions most people not from a financial or strategy backgound would have about NI’s situation.

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2

[Frank]

An update from Nick Williams, CEO of Native Instruments – Native Instruments Blog

 

I want to share a direct update on the restructuring process underway here at Native Instruments. Business continues as usual across Native Instruments, iZotope, Plugin Alliance, and Brainworx. Our products, platforms, services, downloads, and customer service remain fully available.

The support we are receiving from our partners, artists, and community has been extraordinary. This loyalty isn’t something we take for granted, and it’s a reflection of what Native Instruments means to the people and businesses we work with every day.

At the end of January I said: “We are working diligently and responsibly to secure a healthy, financially sustainable future for Native Instruments.” This remains true – and our determination to achieve a sustainable future is strengthened and energised by your support.

We are currently in an active M&A process that is progressing well, with strong interest from multiple parties with deep roots in audio and technology. We see a clear path to achieve our goal to provide continuity for creators, customers, and partners.

As part of the restructuring process, Native Instruments GmbH and a number of our German entities will shortly be moving through expected legal steps, including transitioning from “preliminary insolvency” into formal “insolvency” proceedings where applicable. These are expected steps in the process we are working through.

What gives me confidence in our future isn’t just the progress we’re making – it’s also the extraordinary passion and dedication of the entire team here at Native Instruments. We continue to deliver every day, building and shipping products, and looking after our customers.

We’ll continue to share significant updates as we have them.

https://blog.native-instruments.com/update-from-nick-williams-ceo-march-2026/

 

3

[LinkedMusicians]

According to industry chatter (which means this could be true or not true), Fender, Focusrite, Avid, Yamaha/Steinberg, InMusic, and AlphaTheta (Pioneer DJ) have all engaged in talks about acquiring parts or all of Native Instruments.

Of those choices, I’d greatly prefer if Fender took over Kontakt and its ecosystem. Fender has done a good job with software, based on their acquisition and management of PreSonus. I think Yamaha/Steinberg could also manage Kontakt and its ecosystem well, but they’re already a major software player in the digital audio space and own Kontakt competitor, HALion. Consequently, I prefer competition to one player owning too much (IMO) of the market. Avid would be an iffy choice, IMO. AlphaTheta seems to only be interested in NI’s DJ products, and that would appear to be a good fit.

The company I would not want to see with Kontakt and its ecosystem is InMusic. The company has proven to be terrible at managing software brands. They take old brands and don’t invest enough in them. They tend to treat old brands as cash cows, or close to cash cows. Look at BFD. BFD hasn’t had a version update in more than 10 years. It’s had more software problems than I could fit on a page. Then look at AIR Tech’s history of software problems. Then, when InMusic released a brand extension for BFD with BFD Player, it was a huge step backwards. BFD Player isn’t competitive with AD2 or EZDrummer. It’s a far lower quality product with sample libraries that don’t sound anywhere near the same league.

For my fellow music producers and composers, I recommend hitting the pause button on making NI purchases (that includes iZotope, Plugin Alliance, and Brainworx products) until April to May 2026, after a preferred bidder is announced. Sales will always come around. Until then, purchasing any NI products and service is risky.

One more tip: Keep a PDF copy of all your NI serial numbers and purchase receipts. In an M&A scenario (as opposed to when a company merely buys the intellectual property of a company, like what BandLab did with Cakewalk) , the “New Owner” is legally obligated to honor existing licenses, but you are responsible for proving you own the products.

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6

[Author]

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