After Amazon Breakup, IRobot’s Future Hangs In The Balance As Roomba Maker Fights For Survival

Back in 2022, Amazon and iRobot announced plans for the e-commerce giant to buy the company. Amazon likely wanted iRobot for two reasons. One is to expand its smart home portfolio with robot vacuums. Two, to build robots to use in their warehouses. However, that deal was abandoned in January 2024, citing regulatory scrutiny. Leaving iRobot struggling to generate cash and pay off its debt.

The company has been working on restructuring since the deal fell through and has laid off 51% of its workforce since the end of 2023. iRobot has also overhauled its product lineup in hopes of generating revenue growth and growing its customer-base. In fact, it launched eight new Roombas this past week. However, iRobot doesn’t sound very confident about these new products, saying in an earnings statement that “there can be no assurance that the new product launches will be successful”.

iRobot also mentioned in the earnings report that “Given these uncertainties and the implications they may have on the company’s financials, there is substantial doubt about the company’s ability to continue as a going concern for a period of at least 12 months.”

The company took out a $200 million loan from the Carlyle Group in July 2023, to fund the company as a stopgap until the Amazon merger went through. However, now that the merger is dead, the loan was amended for a temporary waiver on certain financial obligations, including forcing iRobot to pay a fee of $3.6 million. If ever a company put up a “For Sale” sign in their window, this is the time.

iRobot, whose name is synonymous with robot vacuums, is facing major competition from China

When you hear about a robot vacuum, it’s likely being referred to as a “Roomba”. That’s iRobot’s brand for its robot vacuums, and it has been synonymous with the market for many years. Similar to Google for search, or Galaxy for Android phones. However, despite iRobot’s brand recognition, it is facing some very stiff competition from China.

At CES in January, you could walk through the Venetian Expo and see tons of robot vacuum makers back-to-back-to-back-to-back. I spent half a day just visiting robot vacuum makers at the show. And there are some pretty incredible advancements in robot vacuum technology, including adding a robot arm and allowing the robot vacuum to go over higher thresholds (not quite stairs, yet). But iRobot was a no-show. Now, they typically aren’t at these shows anyway, but that does give us a hint as to how bad its been for the company.