Once a symbol of cutting-edge home technology, iRobot, the creator of the renowned Roomba, now finds itself grappling with severe financial challenges. The Massachusetts-based company, which was valued at $4 billion just a few years ago, has reported steep revenue declines and substantial losses, casting doubt on its ability to continue operations. How did iRobot, a pioneer in the robotic vacuum industry, get here?
Founded in 1990, iRobot introduced the first Roomba in 2002, essentially creating the “robotic floorcare” market. The Roomba quickly became a household name, with over 50 million units sold worldwide. However, the company’s expansion into new product categories, such as robo-mops and air purifiers, failed to gain traction, diverting attention from its core products.
While iRobot was busy with diversification, competitors like Roborock, Anker, and Ecovacs steadily gained ground. These companies, primarily based in China, introduced advanced technology at competitive prices, eroding iRobot’s market share. In 2023, Roborock captured 22.3% of the global robotic vacuum market, surpassing iRobot’s 13.7%, according to a report by Grand View Research.
In 2022, Amazon announced plans to acquire iRobot for $1.7 billion, a move seen as a potential savior for the struggling company. However, the deal fell apart in early 2024 due to regulatory concerns over competition and privacy, leaving iRobot to fend for itself. Amazon CEO Andy Jassy later criticized the decision, suggesting that regulatory pressure contributed to iRobot’s financial woes.
In the face of mounting challenges, iRobot cofounder Colin Angle stepped down as CEO, making way for Gary Cohen to spearhead a recovery strategy. The company has since refocused on its core Roomba products, cutting staff by 50% and scrapping most new-category ventures. Despite these efforts, iRobot’s financial performance continues to suffer, with 2024 revenues down 23% year-over-year.
In a bid to reclaim its position, iRobot launched eight new Roomba models, incorporating advanced features like LIDAR and AI technology. These products, priced between $300 and $1,000, aim to compete head-on with Chinese rivals. However, the company cautions that success depends on various factors, including consumer demand and economic conditions.
As iRobot navigates this precarious phase, the company’s fate hinges on its ability to adapt to market challenges and reignite consumer interest in its Roomba line. Negotiations with lenders and potential strategic partnerships could provide avenues for survival. Yet, with industry dynamics constantly evolving, only time will tell if the robovac pioneer can sweep away its current troubles and emerge stronger.
