Native Instruments Reorganizes – What Does It Mean?

Native Instruments has announced a major share reorganization that makes the company entirely self-owned.

The reorganization was facilitated by CEO and founding shareholder Daniel Haver, and comprises both a general shareholder consolidation and the reacquisition of about 30% of the company’s shares from a venture capital investor. The consolidation effects complete ownership of the company by its original founders and its executive management team, and makes it independent from external investors.

What’s all that mumbo-jumbo mean for musicians that rely on NI’s apps?

“While this reorganization may sound like an abstract behind-the-scenes process, the implications for our users and our industry are actually quite profound,” according to Haver.

“As a completely self-owned enterprise, we will now be able to pursue our vision for the most forward-thinking music production and DJ technology in an even more energetic and uncompromising fashion.”

Native was already pretty energetic, reporting revenue growth of 60% in 2009 and 70% in 2010.

If any readers have insight on this deal and its implications for the company and its products, leave a comment with your thoughts!

23 thoughts on “Native Instruments Reorganizes – What Does It Mean?”

  1. this happens from time to time. usually, the capital investor ends up wanting some element of the product that the founding shareholders do not. it's probably just something as simple as wanting to refocus the vision of the company.

    with healthy growth like that, i can't imagine the capital investor wanting to get out of its shares in the company. who knows.

  2. The NI product line and sales approach was really corporate… tons of products that are virtually indistinguishable from one another, rarely a sale or price drop, no competitive upgrades, etc. I would hope that now they consolidate the products a bit and start offering more competitive pricing for the modern marketplace.

    The packaging/pricing of NI has always bugged me. I only wanted Reaktor ($400), FM8 ($200) and a couple of the virtual pianos. But those few things were several hundred dollars more than the "Komplete" package, in which there were something like 30 instruments and tens of gigs of samples! Sounds like a value at first glance, but to me it was a giant pile of stuff I wouldn't use that I felt forced to buy. And since they only have like one sale a year, I waited a long time to get Reaktor (at half price!).

    Whatever the deal is, it's awesome that these guys regained control of their own company!

  3. Maybe now they will focus on evolving their products rather than trying to sell uninteresting sample collections. I would love to hear some news about Native's future from the company team.

  4. Presumably with this new development they don't have to pander to corporate interests as much, which means those "boring sample collections" won't be necessary to generate income in quite the same way. I imagine those many sample collections helped to bring in extra money whenever one was introduced, but I doubt they were in any way interesting to work on, development-wise.

  6. This is not a corporation in the sense we usually imagine. It still s a very young company which seems very well managed. The 60 to 70% growth is actually very dangerous from a finacial point of view because it carries a lot of cashflow risks. And it is not sustainable for ever. Actually, with this deal, the company is protrcting itself from future return expectations from the investors, because it is unlikely it will be able to grow at the same pace. So it removes some return pressure which may have called for a casj cow approach.

    From a product range perspective, i do not tjink this will have huge impacts : sample libraries are low risk and high in demand, easy to develop and leverage on s good brand name. So you'll see tem in the future as well. Why? Because given their lower cost and risk, they allow to generate cash for star products and innovation such as hardware or soft synths which are riskier… So, expect more of te same and at the same time, bolder moves in innovation. This is basic portfolio management and the guys at NI do it very well.

  7. And actually the venture capital guys where probably happy to cash the return when all is well before growth slows down, even from a bigger base.

  8. The most relevant thing to be taken from this is that it could end up being a game changer for their product development. I hope they build something crazy now.

  9. Hopefully they'll stop pushing that awful Maschine crap. Make good software instruments, stop trying to be a wannabe Akai.

  10. I really hope this is a good thing. NI's support (particularly with regards to the timeliness of keeping customers informed) has been woeful.
    Ever since the 50% off sales for Traktor and the softsynth, NI has been barely able to keep up.
    I hope this means they can improve.

    At least it means they might sort out the Traktor 2 performance debacle soon! As soon as they are forced to release "hotfixes" instead of proper point releases you know there are problems behind the scenes.

  13. Man, I own Maschine, and I'm not one of those hip-hop producers who take a sample, chop it up and add a beat (no offense). I really tell, you… It's workflow is amazing.

  22. hey can you tell me where you found that information on the growth on NI ? I really need to find some information about the business for my degree project…

  23. hey,

    Anybody knows sales reports of Native Instruments, or any other companies?
    I need it for my essay, and cannot find any over the internet.
    Thanks

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