iRobot, the company known for its Roomba robot vacuums, has filed for bankruptcy following financial challenges. This action comes approximately two years after a proposed merger with Amazon was terminated.
Financial Difficulties and Competition
The company cited several factors contributing to its bankruptcy, including substantial debt, competition from international rivals, and the impact of U.S. tariffs. iRobot is now being acquired by Shenzhen Picea Robotics, its primary manufacturer based in China. Picea Robotics intends to ensure the continued operation of iRobot devices.
Tariff Obligations and Merger Aftermath
iRobot reported in its bankruptcy filing that it owes $3.4 million to U.S. Customs and Border Protection for unpaid tariffs. The majority of Roomba devices are manufactured in Vietnam, which made the company subject to these import fees. Additionally, iRobot owes nearly $100 million to Shenzhen Picea Robotics, the company now taking it over. The failed $1.4 billion merger with Amazon, which was scrutinized by European and U.S. competition regulators, left iRobot with a $200 million loan taken to sustain operations during the review period.
Company History and Recent Performance
Established in 1990 by researchers from the Massachusetts Institute of Technology, iRobot initially developed devices for the U.S. military, archaeological exploration, and environmental monitoring. The company later introduced household cleaning devices, including the Roomba. In recent years, iRobot has faced financial difficulties, reporting a 33% decline in U.S. revenue during its latest quarter. The company had previously issued warnings in March about potential bankruptcy, citing concerns related to consumer demand, competition, and tariffs.
Future Operations
Under the bankruptcy plan, iRobot will transition to private ownership as a component of Picea Robotics. Shenzhen Picea Robotics manufactures its own brand of household devices, 3i, and also lists other brands such as Shark and Anker, which produces Eufy vacuums, on its website.