Category: TC

There’s something painfully American about the arc of iRobot, the company that taught your vacuum to navigate around the furniture. Founded in 1990 in Bedford, Massachusetts by MIT roboticist Rodney Brooks and his former students Colin Angle and Helen Greiner, the company filed for Chapter 11 bankruptcy on Sunday, ending a 35-year run that took it from the dreams of AI researchers to your kitchen floor and, finally, to the tender mercies of its Chinese supplier.

Brooks, the founding director of MIT’s Computer Science and Artificial Intelligence Lab and the robotics field’s resident provocateur, spent the eighties watching insects and having epiphanies about how simple systems could produce complex behaviors. By 1990, he’d translated those insights into a company that would eventually sell over 50 million robots. The Roomba, launched in 2002, became the rare gadget that transcended its category to become a verb, a meme, and, to the amusement of many, a cat-transportation device.

The money soon followed, with the company raising $38 million altogether, including from The Carlyle Group, before going public in a 2005 IPO that raised $103.2 million. By 2015, iRobot was flush enough to launch its own venture arm, prompting TechCrunch to wryly declare that “robot domination may have just taken another step forward.” The plan at the time was to invest $100,000 to $2 million in up to 10 seed and Series A robotics startups each year. It was the kind of move that marks a company’s arrival, the moment when you’re successful enough to fund the next generation’s dreams.

Then came what looked like salvation. In 2022, Amazon agreed to acquire iRobot for $1.7 billion in what would have been Amazon’s fourth-largest acquisition ever. In a press release announcing the news, Angle, who’d been CEO since the company’s inception, spoke about “creating innovative, practical products” and finding “a better place for our team to continue our mission.” It seemed like a fairy tale ending — the scrappy MIT spinoff absorbed into the Everything Store’s sprawling empire.

Except European regulators had other ideas. Indeed, amid threats they would block the deal — they believed that Amazon could foreclose rivals by restricting or degrading access to its marketplace — Amazon and iRobot agreed to kill the deal in January 2024, with Amazon paying a $94 million breakup fee and walking away. Angle resigned. The company’s shares nosedived. It shed 31% of its workforce.

What followed afterward was a slow-motion collapse. Earnings had been declining since 2021 thanks to supply chain chaos and Chinese competitors flooding the market with cheaper robot vacuums. The Carlyle Group, which provided a $200 million lifeline back in 2023, ultimately just prolonged the inevitable. (It finally sold that loan last month — presumably at a discount, though it didn’t say either way.)

Now it’s over, at least, the version of the company that existed previously. Shenzhen PICEA Robotics, iRobot’s main supplier and lender, will take control of the reorganized company. According to a release issued by iRobot on Sunday, the restructuring plan allows iRobot to remain as a going concern and “continue operating in the ordinary course with no anticipated disruption to its app functionality, customer programs, global partners, supply chain relationships, or ongoing product support.”

It also vowed to “meet its commitments to employees and make timely payments in full to vendors and other creditors for amounts owed throughout the court-supervised process.”

What this means for customers longer term is another question, one we’ve reached out to iRobot to ask. In its release, iRobot promises to keep supporting existing products during restructuring; at the same time, its legal disclosures acknowledge the inherent uncertainties of bankruptcy — whether suppliers stick around, whether the process goes as planned, whether the company survives at all.

As The Verge noted in a story about iRobot’s struggles last month, even if iRobot eventually collapses and takes its cloud services down with it, customers’ Roomba vacuums won’t become useless pucks. The physical controls should keep working — a Roomba owner could still jab the button to send it off to vacuum or tell it to head home.

What Roomba owners would lose is everything that make the devices feel futuristic, including app-based scheduling, the ability to tell it which rooms to clean, and voice commands barked at Alexa while sprawled on the couch.

Ref link: How iRobot lost its way home