iRobot, one of the first companies to enter the robotic home vacuum cleaner space, has filed for bankruptcy protection. The troubled company is being taken over by one of its Chinese suppliers.
iRobot Tuesday said it had filed for Chapter 11 bankruptcy in Delaware and will be acquired by a subsidiary of its main supplier, Shenzhen-based Picea Robotics.
Founded in 1990 by MIT roboticist Rodney Brooks and his students Colin Angle and Helen Greiner, iRobot pioneered consumer robotics by applying insights from simple biological systems. Its Roomba, launched in 2002, became a pop-culture icon, selling millions of units and turning robotic vacuuming into a household norm.
The loss-making company was valued at $3.56 billion at its peak in 2021 during the pandemic, driven by strong demand for its products. In 2022, Amazon agreed to acquire iRobot for $1.7 billion, which would have been Amazon’s fourth-largest acquisition at the time. However, the deal was blocked by European regulators. Amazon and iRobot agreed to terminate the deal in January 2024, with Amazon paying a $94 million breakup fee. iRobot is now valued at around $140 million.
iRobot’s decline has been driven by several factors, including a changing market landscape, rising competition, and supply-chain challenges. The company has been particularly affected by its reliance on imports for manufacturing, with its products made in Vietnam.
Despite its challenges, Roomba still holds about 42 per cent of the US market and 65 per cent of the Japanese market for robotic vacuum cleaners.
Picea Robotics is known for manufacturing robotic vacuum cleaners with research, development, and production facilities in China and Vietnam. The Chinese company employs more than 7,000 people worldwide and has sold over 20 million robotic vacuum cleaners.
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The acquisition by a Chinese company could raise concerns over data privacy and surveillance. iRobot is an American company. Amazon’s earlier attempt to buy iRobot had also raised privacy concens on the grunds that the ecommerce giant could access users’ home floor plans through the vacuum cleaner’s mapping features.
Helen Greiner, one of iRobot’s co-founders, said in a LinkedIn post that the company’s restructuring plan under a Chinese owner isn’t good for “consumers, employees, stockholders, Massachusetts or the USA.”
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