Roomba vacuum cleaner firm iRobot files for bankruptcy

iRobot, the US firm behind the Roomba smart vacuum cleaner, has filed for bankruptcy protection after facing competition from Chinese rivals and being hit by tariffs.

Under what is called a pre-packaged Chapter 11 process, Shenzhen-based Picea Robotics, the main manufacturer of its devices, will take ownership of the firm.

The difficult business environment has forced iRobot to cut its prices and invest heavily in new technology, according to documents filed Sunday.

The firm said 46% US import duties on goods from Vietnam, where most of iRobot’s devices are made for the American market, had increased its costs by $23 million (£17.2 million) this year.

The loss-making company was valued at $3.56 billion in 2021 after the pandemic helped drive strong demand for its products. It is currently worth around $140 million.

On Friday, iRobot’s shares fell more than 13% on the tech-heavy Nasdaq trading platform in New York.

Founded in 1990 by three members of the Massachusetts Institute of Technology’s (MIT) Artificial Intelligence Laboratory, iRobot initially focused on defense and space technology before launching Roomba in 2002.

Last year, online retail giant Amazon’s planned $1.7 billion acquisition deal was blocked by the European Union’s competition watchdog.

Picea is a robot vacuum cleaner manufacturer with research, development and manufacturing facilities in China and Vietnam.

It has more than 7,000 employees worldwide and has produced and sold more than 20 million robotic vacuum cleaners.