There’s something painfully American about the arch of iRobot, the company that taught your vacuum to navigate around furniture. Founded in 1990 in Bedford, Massachusetts, by MIT roboticist Rodney Brooks and his former students Colin Engle and Helen Greiner, the company filed for Chapter 11 bankruptcy on Sunday, ending a 35-year run that took it from the dreams of AI researchers to your kitchen floor and, finally, to the tender mercies of its Chinese supplier.
Brooks, founding director of MIT’s Computer Science and Artificial Intelligence Lab and resident provocateur in the robotics field, observed insects in the eighties and gained knowledge about how simple systems can generate complex behavior. By 1990, he had turned those insights into a company that would eventually sell more than 50 million robots. The Roomba, launched in 2002, became the rare gadget that transcended its category to become a verb, a meme, and, to the amusement of many, a cat-transporting device.
Money was soon found, with the company raising a total of $38 million, including from The Carlyle Group, before going public in a 2005 IPO that raised $103.2 million. By 2015, iRobot was ready enough to launch its own venture arm, prompting TechCrunch to sarcastically declare that “robot supremacy may have taken another step forward.” The plan at the time was to invest $100,000 to $2 million in 10 seed and Series A robotics startups each year. It was the kind of move that marks a company’s coming-of-age, that moment when you’re successful enough to fuel the dreams of the next generation.
Then Amazon knocked. In 2022, the corporate giant agreed to acquire iRobot for $1.7 billion, which would be Amazon’s fourth-largest acquisition at the time. In a press release announcing the tie-up, Engle, who had been CEO of the company since its founding, talked about “creating innovative, practical products” and finding “a better place for our team to continue our mission.” It seemed like a fairy tale ending – the ill-fated MIT spinoff got absorbed into the giant empire of The Everything Store.
Except European regulators had other ideas. Indeed, amid threats they would block the deal – they believed Amazon could deter rivals by restricting or reducing access to its marketplace – Amazon and iRobot agreed to end the deal in January 2024, with Amazon paying a $94 million breakup fee and walking away. Angle resigned. There was a huge fall in the company’s shares. It reduced 31% of its workforce.
What happened next was a slow decline. Earnings are declining through 2021 due to supply chain disruption and Chinese competitors flooding the market with cheaper robot vacuums. The Carlyle Group, which provided a $200 million lifeline through 2023, ultimately prolonged the inevitable. (Carlyle eventually sold that loan last month – presumably at a discount, though none have been specified.)
It’s gone now, at least, the version of iRobot that existed before. Shenzhen PICEA Robotics, iRobot’s main supplier and lender, will take control of the reorganized company. According to a release issued by iRobot on Sunday, the restructuring plan allows iRobot to remain as a going concern and “continue to operate as normal without any expected disruption to its app functionality, customer programs, global partners, supply chain relationships, or ongoing product support.”
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It also vowed to “meet its commitments to employees and make timely payments to vendors and other creditors for outstanding amounts during the court-supervised process.”
What this means for customers long term is another question, one that iRobot was eager to answer when we reached out to the company. “To be clear, today’s news has no impact on our business operations or our ability to serve our customers — which remains our top priority,” spokeswoman Michelle Szynal said in an email statement to TechCrunch. “We focus on providing intelligent home innovations that make consumers’ lives better and easier. Our products are not changing.”
In its release, iRobot promised to continue supporting existing products during the restructuring; At the same time, its legal disclosures acknowledge the inherent uncertainties of bankruptcy – whether suppliers survive, whether the process goes according to plan, whether the company survives.
As The Verge noted in a story about iRobot’s struggles last month, even if iRobot eventually collapses and takes its cloud services with it, customers’ Roomba vacuums won’t be idle. Physical controls should continue to work – the Roomba owner can still press buttons to make it vacuum or tell it to go home.
What Roomba owners will lose is everything that makes the device feel futuristic, including app-based scheduling, the ability to tell which rooms to clean, and barking voice commands at Alexa while you stretch out on the couch.
UPDATE: This story has been updated with comment from iRobot.
