As Daniel Haver, one of the original company's founders describes, Native Instruments' vision was to be "the home of the future of sound, the source of a huge arsenal of sounds, instruments and tools that serve musicians of all genres around the globe." That vision took the company from its modest roots in music software in 1997, to become a major player in musical instruments and DJ tools, with a strong portfolio of hardware and software popular globally.
In 2017, EMH Partners invested 50 million Euros in Native Instruments, followed by a further investment in 2020 to achieve majority ownership in the company. The management and board of Native Instruments, together with EMH, developed the company significantly and expanded its position in the industry, doubling the number of users of its products to 1.5 million by the end of 2020.
By following a more consumer-oriented strategy, revenues generated by its music creation and mixing tools increased by 60% since the investment in 2017, while industry partners on Native Instruments’ technology platforms also increased significantly, cementing the company’s global technology leadership.
Since the company’s formation in Berlin in 1996, Native Instruments has established itself as the leading manufacturer of software and hardware for computer-based audio production and DJ'ing. From its modular synth software package, the early success of its Reaktor music synthesis visual programming environment, and Kontakt, its powerful software sampler that empowered the era of virtual instruments, Native Instruments evolved into home recording, guitar effects, and music production and mixing tools.
In 2000, largely in response to the success of Ableton, a company created by Bernd Roggendorf, one of its original founders, Native decided to pursue aggressively the same path with products for the DJ community with its own Traktor software and a growing line of hardware controllers. That much larger market led the Berlin-based company to expand branches to Los Angeles, Tokyo, Paris, and Shenzhen. Today, Native Instruments is one of the largest and most influential companies in the music technology industry, providing creative tools to millions of music creators, and employing a staff of more than 400 throughout its seven offices worldwide.
In August 2020, NI announced a transition to a new leadership team, marking a new chapter in the company’s almost-25-year history. After more than 20 years at the helm, co-founder and CEO Daniel Haver and chief innovation officer and president Mate Galic decided to pass on the baton and step into a new Supervisory Board as Chairman and Deputy Chairman, respectively.
Constantin Koehncke, then Global Marketing Director from the company’s Los Angeles office, became Chief Executive Officer, while Robert Linke, then Director of Sound Products, was appointed Chief Product Officer & President. The announcement was made as the company signaled its best financial year, and the vision was already to propel Native Instruments into a new growth phase. Both Constantin Koehncke and Robert Linke were active DJs and electronic music producers and enthusiasts, not synthesizer or computer music geeks like the original Native Instruments's founders.
Now, with the investment and support of Francisco Partners, Native Instruments is planning to further enhance its products, "building on the company's leadership in technological innovation and deep connections within the community and industry to create more seamless experiences for music creators, with more accessible points of entry for new and established creators alike," the investment announcement states. The company's mission is also now presented as "to make music creation more inclusive and accessible," and to "provide fully-integrated solutions for musicians, producers, and DJs of all genres and levels of experience."
"There’s never been a more exciting time in music, with more creators producing more high-quality music all around the world. We’re thrilled to team up with Francisco Partners to enter the next phase of our journey, combining their global resources and expertise with our passionate team, deep relationships within music and proven track record of technical innovation. Together we can realize our mission to empower and inspire the global community of music creators and help them to unlock their creative potential," says Constantin Koehncke.
"Thanks to the support of EMH Partners over the past years we were able to further reinforce and expand our position as the leading digital music creation company, and now look forward to working with Francisco Partners, EMH Partners and the founding shareholders to continue on this amazing journey,” he adds.
Matt Spetzler, Co-Head Europe and Partner at Francisco Partners, who will join the Native Instruments board of directors adds, "As an innovator in digital music creation, with a supreme brand recognition and outstanding software technology, Native Instruments is a perfect platform and partner for Francisco Partners. We look forward to working together with the management team and the existing shareholder group, utilizing our broad operational and strategic experience and M&A capabilities to help the company accelerate its growth trajectory."
"I couldn’t be more happy about Francisco Partners investing in the company I helped to build and that I led over 23 years. Their expertise and resources will support Native Instruments to make its vision a reality, which is all about serving the global music creator community with exciting new products and a more seamless experience," commented Daniel Haver. "I will remain a shareholder in Native Instruments and support as an advisor where need be. I have no doubts though that the excellent new Executive Team led by Constantin and Robert will do an amazing job, just as much as they’ve got us at light speed to close this important transaction."
Francisco Partners is a global investment firm that specializes in partnering with technology and technology-enabled businesses. Since its launch over 20 years ago, Francisco Partners has raised over $24 billion in committed capital and invested in more than 300 technology companies, making it one of the most active and longstanding investors in the technology industry.
EMH Partners is an owner-led private equity investment firm, managing more than €1 billion of committed capital in Germany, Austrian and Switzerland.
www.native-instruments.com
