Under increased competition and heavy tariff pressure, there is no way to save oneself! iRobot (IRBT.US), the originator of sweeping robots, plummeted before filing for bankruptcy

The Zhitong Finance App learned that Roomba robot vacuum cleaner manufacturer iRobot (IRBT.US) filed a Chapter 11 bankruptcy protection application with the Delaware court last Sunday and stated that it will be privatized after being acquired by its main manufacturer Picea Robotics. Affected by this news, iRobot's US stocks plummeted by more than 82% before the market on Monday as of press release. The company's market capitalization reached $3.56 billion in 2021 due to pandemic-driven demand, but now only about $140 million remains.

According to iRobot's announcement, the company entered into a “restructuring support agreement” with its secured creditor and major OEM Picea. According to the terms of the “Reorganization Support Agreement”, PICEA will acquire 100% of iRobot's shares and cancel the remaining $190 million debt of the 2023 loan, as well as iRobot's additional $74 million debt to PICEA in accordance with the manufacturing agreement between the two parties. Other creditors and suppliers will be paid in full.

According to reports, Chapter 11 bankruptcy protection of the US Bankruptcy Act is a restructuring bankruptcy procedure for enterprises. The core purpose is not to allow enterprises to directly liquidate and go out of business, but to give enterprises that are in financial trouble but still have operational value a chance to “rest and revive.”

iRobot said that this arrangement will greatly optimize iRobot's balance sheet, ensure that the company can maintain normal operations, and preserve its global business layout. Gary Cohen (Gary Cohen), the company's CEO, said: “This transaction will strengthen our financial position and ensure business continuity guarantees for consumers, customers and partners.”

iRobot emphasized that while the bankruptcy process progresses, the company will maintain normal business operations, and the company's application functions, customer service plans, global partnerships, supply chain cooperation, and in-transit product support will not be affected. To ensure business continuity, iRobot has submitted a series of routine motions to the court to ensure that the company can operate in a regular mode, including fulfilling its promises to employees and making timely and full payments to suppliers and other creditors before, during and after the commencement of the process.

Furthermore, iRobot anticipates that if the court finally approves the Chapter 11 bankruptcy and restructuring plan, existing common shareholders will not be able to obtain any shares in the company after the restructuring. All issued and distributed shares of the company will be cancelled, and common shareholders will face full losses on their investments and will not be able to receive any repayment.

In 2022, Amazon (AMZN.US) planned to acquire iRobot for about $1.7 billion in cash, but abandoned it in January 2024 due to pressure from regulatory review. Since then, iRobot has struggled to generate cash flow and repay debts. In March of this year, the company warned that it “has serious doubts about its ability to continue operating” and has been seeking to sell itself. In October of this year, iRobot revealed in a regulatory document that the only remaining potential buyer withdrew after a “long period of exclusive negotiations”, which meant that the company's self-help channel was completely blocked.

The Roomba series developed by iRobot officially entered the market in 2002, pioneering the household cleaning robot category. Its robot products have sold millions of units worldwide, and at its peak, the global market share was over 80%. However, as competition in the robot vacuum industry intensifies, iRobot is no longer popular. When Chinese brands popularized lidar navigation and automatic cloth washing and mopping technology, iRobot still stuck to traditional visual navigation solutions. It only launched its first all-in-one sweeper in 2022, more than five years later than the Chinese brand. At the same time, its flagship product remained more than 1,000 US dollars more expensive, 3 times that of similar products in China. Meanwhile, although iRobot still dominates key markets such as the US and Japan, competition has forced it to lower prices and invest heavily in technology upgrades.

In addition to increased competition, the US tariff policy has also put pressure on iRobot, particularly the 46% tariff imposed by the US on imported goods from Vietnam (iRobot produces sweeping robots for the US market in Vietnam). According to iRobot's filing with the court, tariffs caused the company to increase costs by $23 million in 2025, making it harder to plan for the future.

According to the data, as of September 27, iRobot's cash and equivalent was only 24.8 million US dollars, but the total debt was as high as 508 million US dollars. Shareholders' equity was negative 26.8 million US dollars, and the cash flow was almost exhausted. In the third quarter of 2025, iRobot's revenue in the US market plummeted 33%, while the European and Japanese markets declined simultaneously. According to IDC data, in the first three quarters of 2025, global sweeper robot shipments increased 18.7% year on year. Chinese brands occupied the top five in the world, while iRobot's share fell to 7.9%, and it has been squeezed out of the top five.