Regulatory concerns over data privacy and market dominance tied to Roomba’s mapping capabilities helped block the Amazon deal and affected growth prospects.

Key bankruptcy drivers include intense low-cost competition from Chinese rivals, the failed Amazon deal, worsening finances, tariffs on Vietnamese imports, and an ineffective Elevate turnaround plan.

Earlier in the year, iRobot launched a strategic review amid tariffs and weak demand, raising doubt about its ability to continue as a going concern, with stock volatility remaining subdued.

iRobot carried about $480 million of debt as of mid-2025, with 2024 revenue around $682 million and a remaining staff of 274.

Industry trends show commoditization of robot vacuums, rapid rival innovation, and macro headwinds that dampen discretionary spending, with tariffs and regulatory barriers adding to cost pressures.

iRobot faced liquidity and revenue pressures in its latest quarter, reporting cash on hand under $25 million and about a $50 million drop in quarterly revenue.

iRobot, the Roomba maker, has filed for Chapter 11 bankruptcy and will be acquired by rival Picea in a move framed as a strategic transition to strengthen its financial foundation.

The company says operations will continue normally with no expected disruption to devices, app functionality, customer programs, supply chains, or product support during the restructuring.

Valuation had collapsed from about $3.56 billion in 2021 to an estimated $140 million by December, driven by fierce competition, price cutting, and tariff costs.

CEO Gary Cohen says the filing aims to secure iRobot’s long-term position and preserve continuity for consumers, partners, and suppliers.

A prior Amazon takeover fell through in early 2024 amid regulatory scrutiny, followed by a CEO change and a roughly 30% workforce reduction.

In 2025, iRobot released four new Roomba models that shifted to cheaper components, contributing to weaker market performance.