Roomba maker iRobot files for bankruptcy
Roomba maker iRobot has filed for Chapter 11 bankruptcy in the District of Delaware, ending several difficult years of financial woes for the American robot vacuum company. Announced on Sunday, iRobot will now be acquired by Chinese robotics company Picea, which acts as a secured lender and lead contract manufacturer.
As part of this agreement, Picea will enable iRobot to continue its operations, develop products and maintain its global presence. Picea will also forgive the substantial multi-million dollar debt iRobot owes it. In exchange, Picea will receive full ownership of iRobot, which will become a private, non-publicly traded company.
iRobot could face bankruptcy. But as a vacuum tester, I saw the Roomba flop era coming a mile away.
“Today’s announcement marks a critical step in securing iRobot’s long-term future,” iRobot CEO Gary Cohen said in a statement. “The transaction will strengthen our financial position and help ensure continuity for our consumers, customers and partners.”
Fortunately, this agreement with Picea means that iRobot customers who already own a Roomba should experience no interruption to app features, customer programs, or product support. iRobot further stated that it would continue to “operate as normal, including meeting its commitments to employees and making timely payments to suppliers.”
Crushable speed of light
Unfortunately, iRobot shareholders will not benefit from such a positive outcome. As a result of the Picea acquisition, all existing equity in iRobot will be wiped out. iRobot says its shareholders “will suffer a total loss and will not receive a recovery on their investment.”
The writing has been on the wall for iRobot for some time. Last January, iRobot’s $1.4 billion acquisition deal with Amazon fell through due to European Union antitrust concerns. That prompted the struggling company to announce a significant restructuring, cutting its marketing spending and ultimately cutting more than half its workforce.
Despite this, it wasn’t enough to turn around iRobot’s fortunes. Last March, iRobot said there were “substantial doubts” about its ability to continue after its fourth-quarter 2024 financial results revealed revenue fell 44% compared to the same period the previous year. Annual revenue also fell, from $890.6 million in 2023 to $681.8 million in 2024, a reduction of more than 23%.
The company had hoped its 2025 product line would turn around its fortunes, with Cohen saying at the time that it was the “biggest product launch in iRobot history.” Unfortunately, this latest effort failed to spark the turnaround iRobot had hoped for. Negotiations with another potential iRobot buyer then broke down in October, sending its already low stock tumbling 33% and leaving the robot vacuum company with few places to turn.
Founded in 1990, iRobot’s Roomba was once synonymous with robot vacuums. Those days are now gone and it will be an uphill battle if iRobot hopes to bring them back.
