How iRobot lost its way home

There’s something painfully American about the arc of iRobot, the company that taught your vacuum how to navigate around furniture. Founded in 1990 in Bedford, Massachusetts, by MIT roboticist Rodney Brooks and his former students Colin Angell and Helen Greiner, the company filed for Chapter 11 bankruptcy on Sunday, marking a 35-year run that has taken it from the dreams of artificial intelligence researchers to your kitchen floor and, finally, to the mercy of its Chinese suppliers.

Brooks, founding director of MIT’s Computer Science and Artificial Intelligence Laboratory and resident robotics instigator, spent the 1980s observing insects and imagining how simple systems could produce complex behaviors. By 1990, he had translated those ideas into a company that would eventually sell more than 50 million robots. Launched in 2002, the Roomba has become the rare gadget that has transcended its category to become a verb, a meme, and a cat transport device, bringing enjoyment to many.

Money quickly followed, with the company raising a total of $38 million, including from The Carlyle Group, before going public in 2005 that raised $103.2 million. By 2015, iRobot was big enough to launch its own investment arm, prompting TechCrunch to quip that “robot dominance may have taken another step forward.” The plan at the time was to invest $100,000 to $2 million in up to 10 Series A robotics startups each year. It was this step that marked the company’s arrival, the moment when you are successful enough to fund the dreams of the next generation.

Then Amazon came knocking on the door. In 2022, the giant company agreed to acquire iRobot for $1.7 billion in what would have been Amazon’s fourth-largest acquisition ever at the time. In a press release announcing the tie-up, Angel, who has been CEO since the company’s founding, talked about “creating innovative, functional products” and finding “a better place for our team to continue our mission.” It seemed like a fairy tale ending — the MIT spin-off absorbed into the everything store’s sprawling empire.

But European regulators had other ideas. In fact, amid threats to derail the deal — as they believed Amazon could lock out competitors 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 pulling out. Corner resigned. The company’s shares fell. It has let go of 31% of its workforce.

What followed next was a slow collapse. Profits have been declining since 2021 due to supply chain chaos and Chinese competitors flooding the market with cheaper robot vacuum cleaners. The Carlyle Group, which offered a $200 million lifeline in 2023, has finally succeeded in prolonging the inevitable. (Carlyle finally sold that loan last month — likely at a discount, though it didn’t specify either way.)

At least, the version of iRobot that once existed is now gone. Shenzhen PICEA Robotics, iRobot’s main supplier and lender, will assume control of the reorganized company. According to a statement issued by iRobot on Sunday, the restructuring plan allows iRobot to remain as a going concern and “continue operating in the normal course without any anticipated interruption to application functionality, customer or global partner programs, supply chain relationships, or ongoing product support.”

It also pledged to “fulfill its obligations to employees and make timely and full payments to vendors and other creditors for amounts owed throughout the court-supervised process.”

What this means for long-term customers is another question, which iRobot was keen 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 continues to be our top priority,” company spokeswoman Michelle Zainal said in an emailed statement to TechCrunch. “We continue to focus on delivering smart home innovations that make consumers’ lives better and easier. And our products don’t change.”

In its release, iRobot similarly promised to continue supporting existing products during the restructuring; At the same time, its legal disclosures acknowledge the uncertainties inherent in bankruptcy — whether suppliers will continue to operate, whether the process goes as planned, and whether the company will survive at all.

As The Verge noted in a story about iRobot’s difficulties last month, even if iRobot eventually collapses and takes down its cloud services, customers’ Roomba vacuums won’t become useless balls. The physical controls should still work — the Roomba owner can still press the button to send it to the vacuum or tell it to go home.

What Roomba owners will lose is everything that makes the devices feel futuristic, including app-based scheduling, the ability to tell it which rooms to clean, and Alexa’s voice commands while it’s lying on the couch.

Update: This story has been updated with comment from iRobot.