There’s something emblematic of American innovation in the story of iRobot, the company that introduced us to smart vacuums that can navigate around furniture. Founded in 1990 in Bedford, Massachusetts, by MIT roboticist Rodney Brooks along with his former students Colin Angle and Helen Greiner, the company filed for Chapter 11 bankruptcy this past Sunday. This marked the end of a 35-year journey that transformed dreams from AI research into household reality, only to ultimately return to the hands of its Chinese suppliers.
Rodney Brooks, who was the founding director of MIT’s Computer Science and Artificial Intelligence Lab and a key figure in robotics, spent much of the 1980s studying insects, realizing how simple systems could yield complex behaviors. By 1990, he had turned those insights into a company that would go on to sell over 50 million robots. The Roomba, introduced in 2002, became a pop culture icon, even evolving into a verb and a meme, much to the amusement of many as a makeshift cat transport device.
Following the success, iRobot raised a total of $38 million, including investments from The Carlyle Group, and went public in 2005 with an IPO that netted $103.2 million. By 2015, the company was doing so well it launched its own venture arm, leading TechCrunch to quip that “robot domination may have just taken another step forward.” At the time, their plan involved investing between $100,000 and $2 million in up to 10 seed and Series A robotics startups annually. This kind of move indicates success; it’s when a company feels confident enough to invest in the next generation.
Then Amazon came into the picture. In 2022, the retail behemoth decided to buy iRobot for $1.7 billion, making it one of Amazon’s largest acquisitions at the time. In a press release announcing the merger, Angle, who had been CEO since the beginning, expressed excitement about creating innovative products and finding a better home for the team to continue their mission. It looked like a fairy tale ending — the once scrappy MIT spinoff becoming part of Amazon’s vast ecosystem.
However, European regulators had other plans. They threatened to block the deal, concerned that Amazon could limit competition by controlling access to its marketplace. Consequently, Amazon and iRobot agreed to terminate the acquisition in January 2024, resulting in Amazon paying a $94 million breakup fee and walking away from the deal. Angle resigned, shares plummeted, and the company let go of 31% of its workforce.
What happened next was a gradual decline. Earnings had been dropping since 2021, mainly due to supply chain issues and a surge of cheaper robot vacuums from Chinese competitors. The Carlyle Group initially provided a $200 million lifeline in 2023, but ultimately it merely delayed the inevitable. Last month, Carlyle sold that loan, likely at a loss.
Now, it’s a new chapter for iRobot, as Shenzhen PICEA Robotics, its main supplier and creditor, will take control of the reorganized company. According to a statement from iRobot, the restructuring plan will allow the company to continue its operations without disruption to app functionalities, customer programs, or supply chain relationships.
They also committed to meeting obligations to employees and ensuring timely payments to vendors and creditors throughout the bankruptcy process.
Looking ahead, it’s unclear what the long-term effects will be for customers. In an email to TechCrunch, iRobot spokesperson Michèle Szynal reassured that the recent developments wouldn’t disrupt business operations or their ability to serve customers, which remains their priority. She affirmed, “We are focused on delivering intelligent home innovations that enhance consumers’ lives. Our products are not changing.”
In their release, iRobot reiterated their commitment to supporting existing products during the restructuring phase, while also acknowledging the uncertainties that come with bankruptcy — such as supplier reliability and the overall success of the process.
As noted by The Verge, even if iRobot ultimately fails and its cloud services shut down, Roomba vacuums won’t become useless. Users can still operate the devices using physical controls. However, they would lose the high-tech features that make the Roomba feel advanced, such as app-based scheduling, the ability to direct it to clean specific rooms, and voice control via Alexa from the comfort of their couches.
Update: This story has been updated with a comment from iRobot.
