iRobot The U.S. technology company behind the iconic Roomba vacuum robot brand filed for Chapter 11 bankruptcy protection after years of persistent liquidity problems, marking the end of its status as an American company by selling all operations to Picea Robotics, a major Chinese manufacturer and creditor.
This bankruptcy filing in Delaware does not mean the business is closing but signals a change of ownership. iRobot will become a private company fully owned by Picea Robotics, which has production bases and research centers in China and Vietnam, while iRobot shares will be permanently delisted from the U.S. stock market.
iRobot was founded in 1990 by researchers from MIT and made a major impact in 2002 with the launch of “Roomba” —a spherical vacuum robot that became a symbol of smart home innovation from the U.S. The company once held market shares as high as 42% in the U.S. and 65% in Japan.
However, this advantage gradually eroded due to price competition from Chinese brands that developed technology faster and priced products significantly lower, forcing iRobot to cut prices, increase investments, and bear higher costs continuously.
Court documents indicate that iRobot faced intense competition from Chinese rival Ecovacs Robotics. While still holding key market shares in the U.S. and Japan, iRobot had to reduce prices and heavily invest in technology.
The situation worsened after a $1.7 billion acquisition deal with Amazon, announced in 2022, collapsed in early 2024 due to regulatory resistance in the U.S. and Europe. This deal was seen as iRobot’s last chance, and its failure led to layoffs exceeding 30% of staff and the immediate resignation of the CEO.
Financially, iRobot struggled with weak sales and tight cash flow. By the end of the third quarter last year, the company had less than $25 million in cash and no access to new funding sources. Revenue dropped by over 25% year-on-year, with U.S. sales declining more than 30%.
Besides competition, new U.S. import tariffs severely impacted the company, particularly a 46% tax on goods produced in Vietnam, iRobot’s main production base for the American market. This increased costs by over $23 million in one year. Meanwhile, iRobot’s stock price has fallen more than 50% in the past year and over 90% compared to five years ago.
Under the restructuring plan, Picea Robotics will acquire all of iRobot’s shares, cancel more than $190 million in debt, and an additional $74 million in manufacturing contract liabilities. Other creditors and suppliers will be fully paid.
iRobot, once a leader in the vacuum robot market valued at $3.56 billion in 2021 due to pandemic-driven demand, now has a valuation of about $140 million. The iRobot case clearly reflects the global technology industry's larger picture, where a once-iconic U.S. brand that set innovation standards is forced to step back and transfer ownership to a Chinese manufacturer amid fierce cost, technology, and geopolitical competition rapidly shifting global market power balances.
Source of information Reuters , Business Insider
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