Propellerhead Software Takes On Outside Investor

Propellerhead Software announced today that the company is bringing on board private equity fund Verdane Capital IX (Verdane) as a new partner. Verdane will become an active owner of Propellerhead.

Verdane has experience driving growth in software and e-commerce companies. Propellerhead founder & CEO Ernst Nathorst-Böös will continue to lead the company.

Propellerhead is focusing intensively on increasing the development team and pace, strengthening the company’s position in- and outside of the music industry and further developing their mobile music-making platform.

“Propellerhead is a vital part of the ‘Swedish music wonder’ phenomenon and possesses some of the leading expertise in the world of digital music software and digital sound processing,” says Pål Malmros, Partner at Verdane Capital Advisors. “We are excited about further strengthening Propellerhead’s leadership position in the market.”

“We have revolutionized the music industry several times and now we want to take the next step in our vision, to give even more people the opportunity to create more and better music,” says Ernst Nathorst-Böös, CEO and founder of Propellerhead. “With Verdane’s help, we will be able to reinforce our focus on developing new products for the next generation of music makers.”

38 thoughts on “Propellerhead Software Takes On Outside Investor

      1. This investor seems to be very Scandinavian minded seeing their locations. It would surprise me when they only invested for selling.

      2. Keep in mind that if someone becomes an investor/partner in music soft/gear industry
        there must be a new blueprint on the table ……

    1. Pretty much this.

      Propellerhead used to be fun and some of their software were really good at the time they released them (Rebirth, Recycle, Reason before their experiments with Record and then commitment to their own closed ecosystem).

      New reason version is the only software from them I don’t own. I even purchased some versions of Reason just to support them, but it is over for me. They make software to some rap artists and not for electronic musicians.

      I am usually the guy who makes average decisions so me abandoning Reason means they are running out of money now.

      1. I stopped at version 7. Tried version 8 but the new file browser didn’t play well at all with a dual-monitor setup so skipped it and hoped for improvements in 9. Then version 9 was pretty much just new “music generating” devices that didn’t interest me in the slightest, and I’ve now switched to Bitwig. Spent way too much on Rack Extensions up until then and I’m now sitting on a ton of plugins that I don’t want to use and can’t sell or even give away because of the shitty EULA.

        Propellerhead are not even bothering playing catch-up any more, just trying to cash in on “simplicity” and “anyone can make music!”. They can’t even rely too much on the unique CV routing anymore what with Bitwig focusing heavily on modulation and may have even surpassed PH in that regard with version 2.
        I’m completely done with PH. Despite what initial impressions may tell you I no longer believe they are a user-friendly company.

      2. Dude, this is so far off the mark – Reason is the *perfect* environment for electronic musicians and sound designers. Most of them just don’t know it yet. But I don’t see how anything about Reason has changed so drastically that’d make it no longer suitable for electronic musicians. Everything that was there, is still there. Plus audio, pitch editing, time warp, third party plugins and auto-theory modules. All of which are optional.

        I’m just wrapping up 11 tracks of 80s Synthwave/Rock/Electronica done entirely in Reason and it’s been a joy. I’m really looking forward to giving people an insight into the production process of this because I think a lot of folks have the wrong idea about Reason.

        1. It’s not about where they’re at right now, it’s about looking into the future and seeing negative trends in the development of the software. Yes, Reason is a highly capable DAW that’s on par with most of what’s on offer out there right now, but that’s not the issue. The issue is this: Why should I as a customer continue to spend money on updates and non-transferrable plugins if PH show no interest in making the software better for my usergroup? All I see them do is trying to appeal to users who don’t have much technological expertise, making things simpler and more accessible. This isn’t bad per se but it doesn’t give me much confidence that they’re going to continue staying up to date with modern advancements in audio technology, while other DAWs are constantly pushing new ideas and concepts.
          This is not just a problem with Propellerhead, many Ableton users are beginning to feel fed up with the lackluster updates and failure to meet customers’ expectations. This is a big reason why you’re seeing more and more producers switching to, or choosing as their first DAWs Bitwig, Studio One, and other alternatives. These companies are at least listening to what their users want and constantly developing their software to make it more capable functionality-wise.

          Honestly, looking back to the time when PH actually had some significant updates to their software, those updates were pretty much just basic functionality, catching up to other DAWs with midi out, bussing, parallel processing and so on. The sales pitch seemed to be “imagine how good it would be if Reason not only had its great routing system, but also functioned like a normal DAW!”. The ONLY thing they have going for them right now for electronic musicians is the CV routing, and as I said, other DAWs are right now developing solutions that rival that functionality. What do they have to offer at that point?

          Is it a capable DAW? Yes of course, I’ve made many good tracks with it and have had a lot of fun doing so. I’ve had tons of fun with creative cv routing. But I’ve also had a ton of fun with the routing in Bitwig, in which I can also use VSTs that I can use in almost any other DAW should I wish to switch.

          To illustrate the situation in regards to routing:
          Where in Reason I would have to create an LFO device, route that into a combinator, and then via the programmer route the modulation source into the device parameter I want to modulate, in Bitwig I can just put an LFO modulator on any device, click a button, and then adjust the modulation level on any parameter. Not to mention that in Reason, in order to get a random LFO i’d need to create a malström or a thor and route its LFO to a cv out (in addition to the routing I explained earlier), while Bitwig just has a simple random LFO modulator ready to go.
          What I’m saying is this: PH dropped the ball. They failed to innovate and now another DAW that’s only on version 2 has pretty much surpassed them on their biggest strength.

  1. My pro tip as Reason user to Propellerheads… allow VST’s. The closed RE ecosystem has no benefits to the user. None. Fine, VSTs are not 100% stable so what, let me the customer decide what I want to install, not this closed ‘by Apple inspired’ system.

    Reason is still a great and inspiring DAW but a lot of parts are dated. (The main sampler (nnxt) is 15 years old, the mclass stereo imager doesn’t let you do proper s/m mixing etc. )

    1. Come on now… You can already do this. Run the softsynth in standalone mode and link to Reason as a midi device and then send the audio back into reason. This has been possible for years…

  2. it boils down to the sandbox of Reason. why, unless you are starting fresh into computer-based music making, would you switch to Reason when you’ve bought third-party software plug-ins that aren’t welcome as an RE? you have spend more money while the plug-ins you previously purchased sit dormant as you attempt to learn a new DAW (in this case Reason). All the best to Propellerhead who were pioneers of the softsynth thing (ReBirth)…yeah, it doesn’t look good

  3. If someone invests it means it desires to have return. To have return it has to go for the masses and for Reason that means going away from the niche of which it’s been living. And that doesn’t sound good. Reason may lose its identity.

  4. I switched to Reason myself after years of Cubase and Logic. I personally prefer rex files for any electronic music and I like the routing scheme but have also recorded traditionally with it for a few years now. It intergrated easily the first day, it proved many preamps pointless and it sounds fine on input. I wish there was something like a Distressor, after buying some decent EQ and gate rack extensions I dont need a lot anymore. Id like to see rack extensions pushed as a format, the triggering possibilities can be complex, fast. Being able to just dump that set up to a Combinator is a godsend. I gave it a fair shot, it worked better than my previous setups. I hope this is an improvement because I already like it quite a bit.

  5. This looks like what Bain Capital Private Equity did by acquiring Guitar Center and Staples Office Supply. Wasn’t good for either of those companies.

  6. I think this will give Propellerhead the much needed capital and support to more aggressively expand their product line…which is what they have wanted to do for some time. I love reason it’s not my only daw but I’ve used it for so long and it’s always been a great inspiration. There’s still a lot of untapped potential in reason…expanding the modular capabilities being one. Hardware and iOS applications being developed would push them forward aswell.

  7. I agree with Damon above. Propellerheads have always been doing things right. Their products have always been ahead of their time, revolutionary, inspirational, and down-right code-savy. To bring aboard a private equity (fund) firm is the right thing to do. Their products will expand at a faster pace. I am sure Propellerheads were careful with such decision in order to move forward; I doubt it’ll affact the quality-control of their existing products. There’s no way Propellerheads will allow any sort of degradation to their existing products to sink lower than their high-standards. Reason is a very important app/DAW/tool to lose its market share.

  8. The last sentence is telling: “…we will be able to reinforce our focus on developing new products for the next generation of music makers.” From this we can infer that while Reason will continue to be their flagship product, there is a push to expand their product line. The effect this will have on Reason development work going forward is unclear at this point.

  9. Guaranteed those investors are already working toward their exit strategy. Expect a lot of fast changes in the product/service line, and a lot of advertising, followed by another sell off of the company. I’m betting it’s a 2-3 year plan.

  10. I see Reason and future line returning to their core…and focusing on modular and mobile applications. Software has taken a huge hit, anyone in the industry knows this has been a reality for some time. Cheap hardware and cheaper manufacturing techniques have made it possible for hardware to tap and consume a lot of the software companies target markets…people forget this is a buisness and times change. I respect them for making the choice.

  11. would be awesome if they made all there instruments and rack extensions available to use in ableton . reason has some nice sounding and workflow devices but the main interface of the program went south after version 5 in my opinion. the big mixer sounds great but fucked up the whole esthetic. hope they are around in some sense . make the rack extensions able to use in other daws and make a mobile version of reason 5 with recycle and rebirth built in for ios and android and that my friends will be nice.

  12. This saddens me. I didn’t know Props were having such a rough time (financially). Reason was my first experience with making computer based music. I’ve had every version from 2 – 7. My gf (at the time) bought 2 for me, and it was one of the best Christmas presents that I have ever received. I was using an ASR-10 before that for sampling/beat making, and Reason with Recycle made the whole process much more intuitive and powerful for me. Chopping loops suddenly became a very quick and easy process. I loved the Reason rack, and learned all about signal flow by playing with it. Subtractor helped me hone my early subtractive synthesis abilities. I have since moved to Logic and Live as my main DAWs, but I still use Reason to sketch out ideas sometimes. The strength of Reason lies in it’s encouragement of experimentation. I hope the Props are able to successfully navigate this merger and strengthen their brand and products. It would really be a shame to see them fold up.

  13. a new investor means fresh ideas maybe we might see Reason bringing in more companies onboard the RE platform the same way they did with Ozone

  14. If they could have waves stuff,slate, etc. Some big vst names translated to rack format that could change a lot. Just imagine mix with mixer like that but with some waves inserted. Some proper studio controler wouldbe cool too.kind of 24ch/preamps/eq,sends control.I mainly mix in cubase but when i write there is no other way like rewire it with reason,its so fast and easy to designe new sounds.Wishing to propellerhead all the best 🙂

  15. I love Reason, but you have to be blind not to see what they have done with it since the rack extension move. Of course, long time Reason users are mostly going to eventually get into the RE’s, with others moving on to other stuff, but they forgot about drawing in new users. When your base offering has the same basic setup as Reason has had over 10+ years and the only way to ‘modernize’ is to spend some serious cash on devices that you will ONLY be able to use in Reason with ALL the competition you have now that all offer the use of VSTs. Tough sale.

    Quite honestly too, on the RE’s……..I own a ton of them and its the cv/gate tools and FX units that are the real benefit to expanding on Reason. As nice as some of the synths are you CAN get eh same sounds from Reason’s core synths and samplers if use with a combinator. Reason needs to revamp its sound engine so that it can take on new forms of synthesis. There are rack extension companies like nucleus soundlabs who could really make some out of this world stuff given the right tools to create on. I hope propellerhead addresses this. Otherwise, Reason users are just getting watered down version of older VSTs and miss out on a lot of the wonder the world of VSTs can offer. For the life of me I still can’t get a decent tape simulator in the props shop. 🙁 There are a variety of VST tape simulators to choose from.

    When you can get something like Reaper for under $50 and the Arturia V Collection for $300 (on sale) or Omnisphere which will instantly give you a radio sound, Reason will have to offer more for less if they want to compete. There are setbacks for sound makers that Propellerhead will have to deal with, like the insane royalty rate on refill sample collections, and the instruments still not able to properly stream audio which keeps the majors from developing for it. Seeing Reason users get all excited about 10 year old VSTs like the korg mono and poly 6 was kind of embarrassing. Propellerhead will have to do a lot to change the perception of what Reason is if they want to compete with these amazing DAWs they have out there like Bitwig, Studio one, Ableton ect. VSTs aren’t really needed if your open up Reason and price these rack extensions like the app’s they are. Besides some of the free VSTs out there offer some incredible stuff, imagine if Reason was that open as a platform?

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