iRobot, the maker of the Roomba vacuum cleaner, filed for bankruptcy protection on Sunday. As a result, the company plans to go private through a buyout by its primary manufacturer, Picea Robotics. Earlier this year, the firm warned about its ability to continue operating. Therefore, it filed for Chapter 11 protection in Delaware as pressures intensified. At the same time, rising competition and new U.S. tariffs added strain to its finances.
Competition, Tariffs, and Financial Pressure
In 2024, the company generated about $682 million in revenue. However, profits declined as lower-priced rivals gained ground. Chinese competitors such as Ecovacs Robotics forced price cuts and higher spending on upgrades. Although the company remains strong in the U.S. and Japan, margins continued to shrink. Meanwhile, new U.S. tariffs worsened the situation. Notably, a 46% levy on imports from Vietnam increased costs by $23 million in 2025. As a result, long-term planning became more difficult.
Debt Restructuring and What Comes Next
The company carries about $190 million in debt from a 2023 loan. That loan supported operations while a $1.4 billion acquisition attempt stalled. After that deal collapsed, missed payments led Picea to acquire the debt from investment funds. Under the bankruptcy plan, Picea will take full ownership and cancel the remaining loan balance. In addition, it will forgive another $74 million tied to manufacturing agreements. Other creditors and suppliers will be paid in full. Meanwhile, the company said the filing will not disrupt apps, customer programs, supply chains, or product support. Once valued at $3.56 billion in 2021, the firm is now worth about $140 million. Founded in 1990, it shifted from defense work to consumer robots with the Roomba launch in 2002. Today, it holds roughly 42% of the U.S. market and 65% of Japan’s robotic vacuum market, while employing 274 people at its Massachusetts headquarters.
