Roomba vacuum cleaner firm iRobot files for bankruptcy

iRobot, the U.S.-based company known for its Roomba smart vacuum cleaners, has filed for bankruptcy protection. The company cited increased competition from Chinese manufacturers and the burden of import tariffs as contributing factors to its financial difficulties.

According to filings made public on Sunday, iRobot was forced to lower its prices and invest heavily in new technologies to remain competitive in a challenging market. The company is undergoing a "pre-packaged" Chapter 11 process, which will result in Picea Robotics, the Shenzhen-based manufacturer of iRobot's devices, taking ownership of the firm.

The company stated that U.S. import duties of 46% on goods from Vietnam, where the majority of iRobot's products destined for the American market are manufactured, added $23 million to its costs this year.

iRobot's valuation has plummeted from $3.56 billion in 2021, when pandemic-related demand drove sales, to approximately $140 million today. The company had been operating at a loss.

Shares of iRobot fell more than 13% on the Nasdaq trading platform in New York on Friday.

iRobot was founded in 1990 by three members of MIT's Artificial Intelligence Lab. Initially, the company focused on defense and space technology before launching the Roomba in 2002.

A planned $1.7 billion acquisition of iRobot by Amazon was blocked last year by the European Union's competition regulator.

Picea Robotics, which will acquire iRobot, is a robotic vacuum cleaner manufacturer with R&D and production facilities located in both China and Vietnam. The company employs over 7,000 people globally and has sold more than 20 million robotic vacuum cleaners.