The manufacturer of Roomba, iRobot, has initiated Chapter 11 bankruptcy proceedings in Delaware, marking the end of several tough years of financial challenges for the U.S. robotic vacuum firm. Announced on Sunday, iRobot is set to be acquired by the Chinese robotics company Picea, which has been its secured lender and main contract manufacturer.
As per the agreement, Picea will permit iRobot to maintain operations, innovate products, and uphold its international presence. Additionally, Picea will eliminate the considerable multimillion-dollar debt owed by iRobot. In exchange, Picea will obtain complete ownership of iRobot, transforming it into a private entity that will no longer be publicly traded.
“Today’s announcement signifies a crucial turning point in ensuring iRobot’s long-term viability,” iRobot CEO Gary Cohen stated in a press release. “The transaction will fortify our financial stability and aid in providing continuity for our consumers, customers, and partners.”
Fortunately, this arrangement with Picea indicates that current iRobot customers who own a Roomba should not face any interruptions in app functionality, customer services, or product support. iRobot also mentioned it will keep functioning normally, ensuring commitments to employees and timely payments to vendors.
Regrettably, iRobot’s shareholders will not see such a favorable outcome. Due to Picea’s acquisition, all existing equity in iRobot will be eliminated. iRobot asserts that its shareholders “will suffer a total loss and will not receive any recovery on their investment.”
The indicators of trouble for iRobot have been evident for some time. In January, iRobot’s $1.4 billion acquisition deal with Amazon fell apart because of antitrust issues raised by the European Union. This led the struggling company to reveal a significant reorganization, cutting back on marketing expenditures and ultimately laying off more than half its workforce.
However, this was insufficient to turn around iRobot’s situation. In March, iRobot indicated there was “substantial doubt” about its ability to continue as its Q4 2024 financial results showed a 44 percent decrease in revenue compared to the same period the prior year. Annual revenue also plummeted from $890.6 million in 2023 to $681.8 million in 2024, a decline of over 23 percent.
The company had anticipated that its 2025 product lineup would reverse its fortunes, with Cohen stating at that time that it represented the “largest product launch in iRobot’s history.” Unfortunately, this last-ditch attempt did not trigger the recovery iRobot had hoped for. Discussions with another prospective buyer subsequently fell apart in October, causing its already declining stock to drop by 33 percent and leaving the robot vacuum firm with limited options.
Established in 1990, iRobot’s Roomba was once a key player in the robotic vacuum market. Those days are now in the past, and it will be a formidable challenge for iRobot if it aspires to reclaim its former status.