Roomba Maker iRobot Files for Bankruptcy Amid Tariffs, Tech Competition and Amazon Deal Collapse

For two decades, the Roomba was shorthand for domestic futurism – a small, circular robot quietly whirring away while you got on with your life. 

But this week, the company behind the iconic smart vacuum, iRobot, filed for bankruptcy protection in the US, marking a dramatic reversal of fortune for one of consumer tech’s early smart-home success stories.

Under a “pre-packaged Chapter 11 process,” iRobot will be taken over by its main manufacturer, Shenzhen-based Picea Robotics, a move designed to keep the business operational while restructuring its finances. The company says the bankruptcy filing is not expected to disrupt its app, supply chains or customer product support – a crucial reassurance in an era where hardware without software continuity is effectively dead on arrival.

Founded in 1990 by three engineers from the Massachusetts Institute of Technology’s Artificial Intelligence Lab, iRobot didn’t begin life cleaning kitchens. Its early work focused on defence and space technology before pivoting to domestic robotics with the launch of the Roomba in 2002. The product became a cultural staple, helping normalise the idea of autonomous machines in everyday life long before “smart home” became a marketing category.

At its peak, the Roomba commanded around 42% of the US robotic vacuum market and an impressive 65% share in Japan. During the pandemic, demand for home tech surged, pushing iRobot’s valuation to $3.56bn in 2021. Today, that figure has collapsed to roughly $140m.

So what went wrong?

The answer sits at the uncomfortable intersection of geopolitics, global manufacturing and hyper-competitive consumer tech. iRobot has been squeezed by cheaper Chinese rivals, such as Ecovacs Robotics, forcing the company to slash prices while simultaneously investing heavily in new technology to stay relevant. According to corporate filings, this combination proved financially unsustainable.

Then came tariffs. Most of iRobot’s devices for the American market are manufactured in Vietnam, which has been hit with US import duties of 46%. The company said these tariffs increased its costs by $23m this year alone and made long-term planning significantly harder. Trade tariffs imposed under Donald Trump’s administration were intended to protect American industry – Trump has argued the import taxes would boost US jobs – but for globally-manufactured tech brands, the impact has been punishing.

The situation worsened after the collapse of Amazon’s planned takeover of iRobot. The $1.7bn (£1.3bn) acquisition, announced in 2022, was blocked by the European Union’s competition watchdog. Regulators raised concerns that Amazon could prioritise iRobot products on its marketplace, reducing visibility for rival brands across major European markets including France, Germany, Italy and Spain.

Without that lifeline, iRobot’s balance sheet unravelled. The company owes $352m to Picea Robotics, with $91m past due. Under the restructuring agreement, Picea will acquire 100% of iRobot’s equity, allowing the brand to continue operating under new ownership.

This is what early smart-home innovation looked like: algorithmic mapping, precision navigation and a robot vacuum that actually knew where it was going. Long before “AI at home” became a buzzword, Roomba was already doing the work.
Credit: iRobot

For consumers, the Roomba isn’t disappearing overnight. But symbolically, iRobot’s downfall is a sobering reminder that being first – or beloved – isn’t enough in today’s smart-home economy. 

In a market defined by razor-thin margins, aggressive pricing and geopolitical volatility, even the robots need a backup plan.