iRobot, the maker of the Roomba robotic vacuum cleaner, filed for Chapter 11 bankruptcy protection on Sunday, marking a dramatic reversal for a company that once defined the consumer robotics industry.
The filing clears the way for iRobot to go private under a deal with Picea Robotics, its primary manufacturer, as mounting competition, debt and new US tariffs weigh heavily on its finances.
The company filed in Delaware bankruptcy court, saying the restructuring is aimed at stabilising operations rather than shutting them down.
iRobot said the process is not expected to disrupt its app functionality, product support, customer programmes or supply chain relationships.
iRobot entered bankruptcy with about $190 million in debt, much of it stemming from a 2023 loan used to refinance operations while regulators reviewed a proposed acquisition by Amazon.com.
Under the bankruptcy plan, China-based Picea will take 100% ownership of iRobot, cancelling the remaining $190 million on the 2023 loan as well as an additional $74 million owed under the companies’ manufacturing agreement.
Other creditors and suppliers are expected to be paid in full. The deal values iRobot at a fraction of its former worth.
The company was valued at $3.56 billion in 2021, driven by pandemic demand, but is now worth about $140 million, according to LSEG data.
Competitive pressures erode profits
iRobot generated about $682 million in revenue in 2024, but profitability has steadily deteriorated.
Court filings show that competition from lower-priced Chinese rivals, including Ecovacs Robotics, forced the company to cut prices and invest heavily in technology upgrades to defend its market position.
While iRobot remains dominant in key markets such as the United States and Japan, holding roughly 42% and 65% market share respectively, the influx of cheaper alternatives has made it harder to maintain margins.
Earnings have been under pressure since 2021, following pandemic-era demand that later proved unsustainable.
Tariffs add fresh strain
New US tariffs compounded those challenges.
iRobot manufactures vacuum cleaners for the US market in Vietnam, which has been hit with a 46% levy on imports.
According to court documents, the tariffs added roughly $23 million to costs in 2025 alone, while also complicating longer-term planning.
The company said the policy uncertainty made it more difficult to forecast expenses and pricing, further straining a business already operating at a loss.
Debt rooted in failed Amazon deal
Amazon had agreed in 2022 to buy iRobot for about $1.7 billion, but European competition authorities raised concerns that the deal could harm rivals.
The companies abandoned the transaction in January 2024, with Amazon paying a $94 million break-up fee.
iRobot’s then chief executive resigned, the share price plunged, and the company cut nearly a third of its workforce.
After iRobot fell behind on payments, Picea acquired the debt from investment funds managed by the Carlyle Group, according to court filings.
From robotics pioneer to restructuring
Founded in 1990 by three MIT roboticists, iRobot initially focused on defence and space projects before launching the Roomba in 2002.
The product became a cultural phenomenon and helped the company sell more than 50 million robots over two decades.
At its peak, iRobot expanded aggressively, even launching a venture arm in 2015 to invest in early-stage robotics startups.
But as competition intensified and costs rose, that early promise faded.
With 274 employees remaining and its future now in the hands of its manufacturer, iRobot’s bankruptcy underscores how quickly fortunes can shift in consumer technology, particularly as global trade policy and low-cost competition reshape the market.
The post A household name falters: how Roomba maker iRobot slid into bankruptcy appeared first on Invezz
