On December 14th, the American robotics company iRobot, famous for its “Roomba” robotic vacuum cleaners, filed for bankruptcy protection in the bankruptcy court of Delaware, USA. The company disclosed that it had reached an agreement with Picea Robotics, a secured lender and major contract manufacturer based in Shenzhen, China, to be acquired by Picea Robotics under court supervision. This transaction will result in iRobot becoming a private company and delisting from the NASDAQ.
iRobot was founded in 1990 by three robotics experts from the Massachusetts Institute of Technology (MIT). Originally focused on defense and space industries, the company achieved great success with the launch of the Roomba robotic vacuum cleaner in 2002, breaking into the consumer market and becoming a household name. Currently, iRobot holds a market share of about 42% in robotic vacuum cleaners in the United States and as high as 65% in Japan.
However, in recent years, the company has been facing challenges such as declining sales, supply chain disruptions, and the failure of Amazon’s acquisition plan. These pressures have ultimately weakened its liquidity.
In March of this year, iRobot expressed concerns about its ability to continue operating. Facing fierce competition from low-cost competitors and the impact of new U.S. tariffs on its production in Vietnam, the company’s operations have continued to deteriorate. This led to the decision to seek a way out through bankruptcy restructuring.
Financial documents indicate that in 2024, iRobot had a total revenue of approximately $682 million, but profits were squeezed by competition from Chinese rivals like Ecovacs Robotics. Despite iRobot’s dominant position in key markets like the U.S. and Japan, price wars forced the company to lower prices and increase investments in technology upgrades, squeezing profit margins.
Additionally, the U.S.’s new tariff policies have placed a heavy burden on iRobot, particularly the 46% tariffs imposed on products imported from Vietnam. iRobot manufactures robotic vacuum cleaners in Vietnam for the U.S. market. According to court filings by iRobot, these tariffs will increase iRobot’s costs by $23 million in 2025.
iRobot was once a target for acquisition by Amazon for $1.4 billion, but the deal ultimately fell through. Currently, iRobot has debts of approximately $190 million.
This debt originated from a loan obtained by iRobot in 2023, when an antitrust investigation in Europe led to the suspension of the Amazon acquisition. iRobot used this loan to refinance its operations.
According to court documents, the collapse of the Amazon acquisition and iRobot’s default on loans to Picea led to Picea, a Chinese manufacturer, acquiring iRobot’s debt from funds under the Carlyle Group, an American investment company.
Under iRobot’s bankruptcy reorganization plan, Picea will acquire 100% of iRobot’s shares, cancel the remaining $190 million loan from 2023, and settle the $74 million debt owed to Picea under their manufacturing agreement. Additionally, other creditors and suppliers will receive full payment.
iRobot stated that the Chapter 11 bankruptcy protection application submitted is a pre-packaged plan, meaning key terms have been negotiated with creditors before entering court proceedings.
During the restructuring process, the company expects to maintain normal operations, with bankruptcy not affecting its app functions, customer service plans, global partnerships, supply chain operations, and ongoing product support.
Market data shows that iRobot experienced a surge in demand during the pandemic in 2021, reaching a market value of up to $3.56 billion at one point. However, the current market value has significantly decreased to around $140 million.
iRobot is headquartered in Bedford, Massachusetts. According to court documents, the company currently has 274 employees.