iRobot has filed for Chapter 11 bankruptcy and plans to go private through a buyout by its main manufacturer, Picea Robotics, amid competitive pressures and increased US tariffs.

Target Information

iRobot, a renowned manufacturer of robotic vacuum cleaners, has filed for Chapter 11 bankruptcy protection amidst growing financial challenges. The company, known for its flagship Roomba product, announced its intent to go private through a buyout by its primary manufacturer, Picea Robotics. Founded in 1990 by three roboticists from the Massachusetts Institute of Technology, iRobot initially concentrated on defense and space technology before successfully launching the Roomba in 2002. The product quickly gained popularity, allowing iRobot to capture a dominant market share of approximately 42% in the US and 65% in Japan.

Despite generating approximately $682 million in revenue for 2024, iRobot has faced increased competition from lower-priced rivals, notably Chinese competitors such as Ecovacs Robotics. The company's profitability has significantly diminished, prompting necessary price reductions and substantial investments towards technological advancements. The firm's financial health has also been adversely affected by the imposition of new US tariffs, notably a 46% levy on imports from Vietnam, where iRobot's vacuum cleaners are manufactured.

Industry Overview

The robotics vacuum cleaner industry has seen rapid growth over the past few years, bolstered by advancements in technology and increasing consumer demand for automated cleaning solutions. However, this growth has attracted significant competition, particularly f