Roomba once reigned supreme in the world of robotic vacuums, conquering both dirty living room floors with its advanced tech and the marketplace it helped create.
But iRobot, the maker of the iconic self-cleaning disc-shaped vacuum, is now finding itself left in the dust as it teeters on the edge of bankruptcy. The Massachusetts-headquartered company, a pioneer in the robotics industry, has warned that it’s running out of options — and cash.
iRobot has grappled with mounting financial strain in recent years, and the collapse of Amazon’s planned $1.4 billion acquisition of the Roomba maker in early 2024 has only exacerbated the company’s troubles.
After months of trying to find a new buyer, iRobot said in a regulatory filing last month that its last remaining potential acquirer pulled out “following a lengthy period of exclusive negotiations.”
The possible iRobot buyer offered a price per share that was “significantly lower than the trading price” of its stock over recent months, the company said in the October 22 Securities and Exchange Commission filing.
The debt-burdened iRobot warned in the filing that if it can’t find fresh funding soon, it “may be forced to significantly curtail or cease operations and would likely seek bankruptcy protection.”
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An iRobot spokesperson told Business Insider that, consistent with its policy, it does not comment “on matters of this nature beyond our public disclosures.”
With the holiday season approaching, the spokesperson said the company remains “focused on executing our strategy and delivering for our valued customers, partners, and consumers.”
iRobot first publicly warned investors that there was “substantial doubt” about its ability to continue “as a going concern” in a March earnings report.
That same month, the company rolled out a new fleet of Roomba vacuums and mops, which CEO Gary Cohen said was aimed at “better positioning iRobot as the leader in the category that we created.”
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“There can be no assurance that the new product launches will be successful due to potential factors, including, but not limited to consumer demand, competition, macroeconomic conditions, and tariff policies,” the company said at the time.
iRobot’s current financial position marks a stunning fall for a company that introduced the world to the Roomba vacuum more than two decades ago and has sold over 50 million models globally since.
Founded by MIT roboticists
Before there was Optimus, Tesla’s humanoid robot, there was iRobot.
iRobot was founded in 1990 by three roboticists from the Massachusetts Institute of Technology — Colin Angle, Helen Greiner, and Rodney Brooks — who had a “vision of making practical robots a reality,” the company says on its website.
Before iRobot had its consumer breakthrough with the launch of the Roomba vacuum in 2002, the company focused on designing robots for space-related research and military use.
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In 1998, iRobot won a contract from the Defense Advanced Research Projects Agency, known as DARPA, to build a tactical mobile robot. This led to the development of iRobot’s PackBot, which was later used in search operations at Manhattan’s Ground Zero following the 9/11 terrorist attacks.
iRobot boasts on its website that its robots have “revealed mysteries of the Great Pyramid of Giza, found harmful subsea oil in the Gulf of Mexico, and saved thousands of lives in areas of conflict and crisis around the globe.”
When iRobot went public in November 2005 at an initial share price of $24, it was already known for its innovative robot vacuums.
By 2013, iRobot had sold over 10 million home cleaning robots, vastly outnumbering the more than 5,000 defense and security robots it had delivered to military and civil defense forces worldwide the year before.
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The company sold its defense and security business to the private equity firm Arlington Capital Partners in 2016 for up to $45 million.
Over the past decade, iRobot’s annual revenue peaked in 2021 at $1.56 billion, but sales have been falling ever since.
iRobot — which today slings models ranging in price from $269.99 to as high as $1,299.99 — may have set the standard for home robot vacuums, but competition has surged from Chinese rivals like Dreame, Roborock, and Ecovacs, and other brands like Shark and Samsung.
In an August SEC filing, iRobot acknowledged that it has, in recent years, “seen increased competition with new product offerings in the robotic floorcare segment and have conceded some market share.”
The failed Amazon-iRobot deal
Amazon agreed to buy iRobot in 2022 for $61 per share in an all-cash transaction, but the deal fell apart two years later with the companies saying there was “no path to regulatory approval in the European Union.”
The failed deal was a major blow to iRobot. The same day the companies announced that the proposed merger was off, iRobot said it would lay off 350 employees, or about 31% of its workforce. Angle, iRobot’s cofounder and longtime CEO, also stepped down as part of the restructuring.
As the cash-strapped iRobot awaited the completion of the Amazon deal that never came, it took out a $200 million loan from the private equity firm Carlyle Group in July 2023.
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iRobot said in last month’s regulatory filing that it had further extended its loan waiver period to December 1 as its financial outlook darkens.
“We are currently in discussions with the Lenders to provide the additional capital we require to fund our ongoing business operations,” iRobot wrote, adding that it may be forced to file for bankruptcy protection if the lenders “do not provide this necessary funding and we are unable to find other sources of capital in the near term.”
The iRobot spokesperson told Business Insider, “As disclosed in our Form 8-K filed with the SEC, we have reached an agreement with our primary lender to extend our covenant waiver under our loan agreement through December 1, 2025, in order to continue our active and ongoing review of strategic alternatives, including, but not limited to, exploring a potential sale or strategic transaction and refinancing our debt.”
Meanwhile, iRobot’s shares — priced at $2.70 as of Wednesday’s market close — have plunged about 65% year-to-date.
