The U.S. company behind the popular Roomba vacuum cleaner, iRobot, has recently filed for bankruptcy protection. This decision comes as the firm grapples with fierce competition from Chinese manufacturers and the financial strain of tariffs.
Bankruptcy Filing Details
iRobot has opted for a pre-packaged Chapter 11 process. Under this, Shenzhen-based Picea Robotics will acquire ownership of the company. This move comes as iRobot has been forced to cut prices and invest significantly in new technologies to remain competitive.
Financial Impact
- iRobot experienced a cost increase of $23 million due to U.S. import tariffs of 46% on goods from Vietnam, where most of its products are made.
- The company, once valued at $3.56 billion in 2021, has seen its valuation plummet to around $140 million.
- Shares of iRobot fell over 13% on the Nasdaq trading platform, highlighting investor concern.
Despite the bankruptcy filing, iRobot assures customers that its app, supply chains, and product support will remain uninterrupted.
History and Market Position
Founded in 1990 by MIT researchers, iRobot originally focused on defense and space technologies. It launched the Roomba in 2002, which has since captured approximately 42% of the U.S. market and 65% of the Japanese market for robotic vacuums.
Previous Acquisition Attempt
A proposed $1.7 billion acquisition by Amazon was blocked by the European Union’s competition regulator last year. This setback further complicated iRobot’s financial landscape.
Picea Robotics Overview
- Picea Robotics specializes in robotic vacuum cleaner manufacturing.
- The company operates research and production facilities in China and Vietnam.
- With over 7,000 employees, Picea has sold more than 20 million robotic vacuums worldwide.
As the industry evolves, the challenges faced by iRobot illustrate the increasing pressures from international competition and evolving market conditions.
