On July 18, 2002, Roosendaal started the 'Free Blender' campaign, a crowdfunding precursor. In May 2002, Roosendaal started the non-profit Blender Foundation, with the first goal to find a way to continue developing and promoting Blender as a community-based open-source project. This also resulted in the discontinuation of Blender's development. After NeoGeo's dissolution, Ton Roosendaal founded Not a Number Technologies (NaN) in June 1998 to further develop Blender, initially distributing it as shareware until NaN went bankrupt in 2002. NeoGeo was later dissolved, and its client contracts were taken over by another company. On January 1, 1998, Blender was released publicly online as SGI freeware. Some design choices and experiences for Blender were carried over from an earlier software application, called Traces, that Roosendaal developed for NeoGeo on the Commodore Amiga platform during the 1987–1991 period.

The name Blender was inspired by a song by the Swiss electronic band Yello, from the album Baby, which NeoGeo used in its showreel. Version 1.00 was released in January 1995, with the primary author being company co-owner and software developer Ton Roosendaal. Blender was initially developed as an in-house application by the Dutch animation studio NeoGeo, and was officially launched on January 2, 1994.

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