Roomba maker iRobot has filed for bankruptcy as Trump's tariffs drive up costs
Once a pioneer of robot vacuums, the Roomba maker said higher tariffs helped tip the company into bankruptcy
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Roomba vacuum cleaners revolutionized the consumer robotics market in the early 2000s. Now the American company behind them has gone bankrupt, partly because of President Donald Trump’s tariffs.
Massachusetts-based iRobot filed for bankruptcy protection on Sunday and said it would hand over control to its main Chinese supplier, Shenzhen Picea Robotics. It cited growing competition from lower-priced rivals and rising costs from tariffs as key reasons.
Most of iRobot’s devices for the American market are made in Vietnam. But the country was hit by 46% import duties as part of Trump’s tariff regime, causing iRobot's costs to balloon by $23 million this year. The levies also made it more difficult to plan for the future, the company said.
Founded in 1990 by engineers from MiT, iRobot started out focusing on defense and space work before pivoting to vacuum cleaners. The Roomba came out in 2002 and rose to about 42% market share in the U.S. and 65% in Japan.
The company generated about $682 million in revenue last year, but it has been forced to lower prices and increase spending on development amid increasingly tough competition from other robot vacuum cleaner manufacturers, such as China’s Ecovacs Robotics.
As recently as 2021, it was valued at $3.56 billion, after the pandemic caused a spike in demand for its products. The next year, Amazon $AMZN made an offer to buy the company that could have changed its fortunes, but the European Union halted that deal because of competition concerns. Now iRobot valued at just $140 million, according to the bankruptcy filing.
The company warned in corporate filings last month that bankruptcy could be in the cards. iRobot owes $352 million to Chinese supplier Shenzen Picea Robotics, and about $91 million of that is past due. Picea will get 100% of the equity interest in iRobot, which will allow the company to keep operating, it said Sunday. The iRobot app, supply chains, and product support functions are expected to continue uninterrupted.