Roomba maker iRobot files for bankruptcy amid mounting losses
What's the story
iRobot, the company behind the popular Roomba vacuum cleaner, has filed for Chapter 11 bankruptcy protection in the District of Delaware. The move comes as part of a restructuring support agreement with Shenzhen PICEA Robotics Co., its main supplier and lender. Under this plan, PICEA will take full ownership of the restructured company while iRobot's common stock will be canceled under the proposed Chapter 11 plan.
Operational assurance
iRobot assures continuity amid restructuring
Despite the bankruptcy filing, iRobot has assured its customers and partners that business operations will continue as usual. The company said there would be no disruption to its app services, customer programs, global partnerships, supply chain relationships or ongoing product support during this transition period. This assurance comes after the company's financial struggles over the past few years due to declining earnings and increased competition in the consumer robotics market.
Financial woes
Financial struggles and market competition
Once valued at $3.56 billion in 2021, iRobot's worth has plummeted to around $140 million today, according to LSEG data. The company has been grappling with macroeconomic and tariff-related uncertainties while facing stiff competition from Chinese rivals like Ecovacs Robotics. These competitors offer advanced features at lower prices, further straining iRobot's market position and profitability.
Company evolution
iRobot's journey and future prospects
Founded in 1990 by three MIT engineers, iRobot has come a long way in over three decades. The company initially enjoyed massive success, selling over 50 million robots. However, its earnings started to decline from 2021 due to supply chain challenges and heightened competition. A potential acquisition by Amazon.com in 2023 also fell through over regulatory concerns.