iRobot files for bankruptcy as Chinese supplier takes over Roomba maker under financial strain

iRobot, the Massachusetts-based pioneer of robotic vacuum cleaners, has filed for bankruptcy protection in the United States and will be acquired by its primary Chinese supplier after facing heightened competition and operational challenges.

The company, best known for its Roomba range of vacuum cleaners, filed for Chapter 11 bankruptcy in Delaware and is set for restructuring. Shenzhen-based Picea Robotics, iRobot’s main supplier and lender, will assume control by acquiring its shares. This move follows a difficult period marked by increased competition from lower-priced Chinese rivals and significant import tariffs. The company, founded in 1990 by engineers from the Massachusetts Institute of Technology, played a leading role in bringing domestic robotics to consumers, particularly since the launch of the first Roomba in 2002.

iRobot generated approximately 682 million dollars in revenue last year; however, its margins eroded due to rivalry from companies such as Ecovacs Robotics and additional compliance costs. Most notably, a 46 per cent tariff imposed on goods from Vietnam, where iRobot assembles many of its products, led to a 23 million dollar increase in its costs over the past year. These pressures, coupled with a failed 1.4 billion dollar takeover by Amazon that fell through after concerns from European competition authorities, hampered the company’s ability to recover financially.

Debts amounting to roughly 190 million dollars accumulated following a 2023 refinancing amid the regulatory investigation into the Amazon deal. Picea acquired iRobot’s debt obligations from investment funds managed by the Carlyle Group when iRobot missed repayments after the Amazon bid collapsed. As bankruptcy proceedings began, iRobot shares were trading at under 1 dollar compared to the 52 dollar per share offer Amazon made and a previous peak of over 133 dollars in 2021.

Chief executive Gary Cohen emphasised that the transaction is essential to secure iRobot’s long-term stability and to maintain continuity for consumers, business partners, and the supply chain. He said that becoming part of Picea Robotics will provide iRobot with the necessary resources to advance in smart home robotics and ensure ongoing customer support. Picea manufactures and services robotic vacuum cleaners globally and operates research and production facilities in both China and Vietnam, having sold more than 20 million units to date.

Despite current difficulties, iRobot’s legacy within the home robotics sector remains significant; it has sold more than 40 million devices, holds 42 per cent of the US robot vacuum market, and controls almost two thirds of market share in Japan. The company confirmed that ongoing support for its mobile application, supply chain arrangements, and product maintenance should be unaffected by the bankruptcy and acquisition process.