Roomba maker iRobot has filed for Chapter 11 bankruptcy protection and agreed to be taken private in a court-supervised restructuring led by its primary contract manufacturer, Picea Robotics.
The Bedford, Massachusetts-based company stated that the deal will enable it to stabilize its finances while maintaining normal operations for its products and services. iRobot, founded in 1990 and best known for bringing robot vacuums into mainstream homes, has been under heavy pressure from cheaper rivals, tariffs, and a failed takeover attempt by Amazon.
Under the restructuring plan, Picea — formally Shenzhen PICEA Robotics Co., Ltd. — will acquire iRobot through the Chapter 11 process. Picea has long been iRobot’s main manufacturing partner and has built and sold more than 20 million robot vacuum cleaners from facilities in China and Vietnam.
“The transaction will strengthen our financial position and will help deliver continuity for our consumers, customers, and partners,” iRobot CEO Gary Cohen said in a statement announcing the move.
From failed Amazon deal to court-supervised sale
The bankruptcy and Picea buyout come after several tough years for iRobot. In 2022, Amazon agreed to buy the company for about $1.7 billion, a deal that could have given iRobot a deep-pocketed parent at a time of rising competition. But European regulators raised serious concerns about the takeover, and Amazon ultimately walked away from the acquisition last year, blaming “undue and disproportionate regulatory hurdles.”
As part of the breakup, Amazon paid iRobot a $94 million termination fee. The Roomba maker said at the time that it would restructure to try to steady the business, but its challenges only grew.
iRobot has faced intense pressure from lower-cost Chinese brands such as Ecovacs and Roborock, as well as new U.S. tariffs on products shipped from Vietnam, where many of its robots are made. Tariff-related costs have run into the tens of millions of dollars, further eroding margins.
Ahead of the bankruptcy filing, Picea or its subsidiaries had already taken over iRobot’s senior debt and large unpaid manufacturing bills, effectively giving the manufacturer significant leverage over the company’s future. The Chapter 11 plan will now convert that position into full ownership, with Picea canceling the debt in exchange for the equity while other creditors are paid in full, according to regulatory filings.
Roomba owners told to expect business as usual
Despite the iRobot Chapter 11 bankruptcy, the company is stressing continuity for existing customers. It said it will keep operating as normal during the prepackaged Chapter 11 process and does not expect any disruption to:
- App functionality
- Customer programs and warranties
- Global retail and distribution partners
- Supply chain relationships
- Ongoing product support and repairs
In other words, Roomba vacuums already in homes should continue to function as usual, and buyers should still receive updates and service.
iRobot expects to complete the restructuring by around February 2026, assuming the bankruptcy court approves the deal on the expected timetable. The company currently employs only a few hundred people, down significantly from earlier years following rounds of layoffs and cost-cutting measures.
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A long fall for a home robotics pioneer
The markets reacted swiftly to the news. In premarket trading, iRobot shares plunged nearly 70%, dropping to around $1.31. At its peak in 2021, the company was valued in the billions of dollars; now, its market value has shrunk to a tiny fraction of that.
iRobot helped define the modern home robot category when it launched the first Roomba in 2002, and over the years it sold tens of millions of robot vacuums around the world. But as the market matured, lower-cost competitors undercut its prices, while recent tariffs and a slowing consumer electronics market added further strain.
Analysts say the restructuring under Picea may keep the Roomba brand alive, at least in the near term, but it also underscores how quickly early tech pioneers can lose ground in fast-moving, globalized markets. For customers, the immediate message is reassurance: the vacuums should keep cleaning, the app should keep working, and support should remain in place.
Behind the scenes, however, iRobot’s future — and the role of Roomba in Picea’s broader strategy — will depend on how the new owner balances its own brand ambitions with the legacy name it just rescued in bankruptcy court.
Sources:
The Verge – “iRobot files for bankruptcy, will be acquired by its manufacturer Picea Robotics”
