iRobot Corp, the parent company of the popular Roomba robot vacuum, has filed for bankruptcy. The company is also now expected to hand over the keys of its operations to its main Chinese supplier, PICEA Robotics Co, which is based in Shenzhen.
Specifically, iRobot Corp’s IP will be handed over to PICEA, while the common stock of the company, founded in 1990 by engineers from the Massachusetts Institute of Technology, will be wiped out under the proposed Chapter 11 plan filed in Delaware on Sunday.
With the bankruptcy plan in place, iRobot will be able to stay operational, where it will be allowed to continue servicing its employees, vendors, and its debts. At the time of writing, the company is believed to have between US$100 million (~RM409 million) and US$500 million (~RM2.04 billion) of assets and liabilities.
A Pandemic, Legal Issues, And A Sea Of Cheaper Rivals
The Roomba is widely regarded as the first robot vacuum cleaner to ever grace the homes of US consumers first, before reaching out to a wider, global market in the early 2000s. It is, simply put, a household name for many folks, selling more than 40 million units up until 2019, when the pandemic hit and, like everything else during this time, it all went sideways for iRobot Corp.
Post-pandemic, sales for the Roomba began to slow, partially due to supply chain problems, but primarily due to cheaper alternatives that were mushrooming from China. Then, in 2022, the company saw an offer made by the multinational company, Amazon, come crashing down due to EU competition laws. It received US$90 million (~RM368 million) as compensation, part of which was used to pay off advisory fees and loans.
(Source: Bloomberg)
