iRobot made Roomba into an icon. Now, it’s in a huge mess
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Just a few years ago, iRobot, best known as the maker of the Roomba, was riding high, with annual revenue topping $1 billion; Amazon bid $1.7 billion to add it to the e-commerce giant’s home technology business. But that deal fell through, and now the Bedford, Massachusetts-based company has reported plunging revenue and steep losses, and recently warned investors of “substantial doubt” about its “ability to continue as a going concern.” With its share price down drastically, it’s now worth about $100 billion. How did the creator of the iconic round robot vacuum—which has sold more than 50 million units—get into this mess?
Although there’s of course more than one answer to that question, a major factor seems to have been an ill-fated focus on dreaming up ways to move beyond the vacuum into new product categories—all the while failing to keep up with new competitors in its core business. Sometimes, those rivals competed on price, but Chinese brands like Roborock developed cutting-edge models praised for advanced technology such as a LIDAR sensor (generally recognized as more accurate than camera sensors) and other obstacle-avoidance and spatial-mapping tech. In short: as iRobot matured, it seems to have emphasized the wrong sort of innovation. (The company declined to comment beyond public statements about its earnings and recent new product announcements.)
Founded in 1990, iRobot released its first Roomba model in 2002, essentially inventing a new “robotic floorcare” category: a relatively affordable robotic vacuum that whirred around on its own, sucking up dust. It was nobody’s vision of the future, but it caught on; some fans gave their Roombas names, treating them almost like techno-pets (and making endless cat-riding-a-Roomba memes). While it quickly attracted competition, the Roomba was long the clear leader, its name becoming a borderline-generic term for all robo-vacs.
This popularity reached a peak in the COVID-19 lockdown era, when many consumers had way too much time to obsess about their domestic environments. By then iRobot had begun exploring (and pouring R&D into) new products, most notably a robo-mop, but also a lawn mower, air-purifying devices, and educational products. The company still looked like an innovator and its share price soared beyond $130 in early 2021, briefly giving the company a valuation of more than $4 billion.
But the new experiments mostly didn’t catch on—while the robo-vac competition did. Several of the fastest-growing robotic-vacuum businesses are based in China, such as Anker, Ecovacs, and Roborock, all of which have eaten into iRobot’s share of the market. Lower prices were part of the equation, but competitors also brought design and technology innovations to the category, improving core functionality. While the whole category declined post-COVID, it’s growing again (in excess of 20 million units were distributed last year, up 11.2%)—but iRobot’s global share has shrunk to 13.7%, compared to 22.3% for Roborock.
Amazon’s 2022 acquisition offer looked like a lifeline—but the deal fell apart in January 2024 under regulatory pressure over competitive and privacy concerns. Cofounder Colin Angle stepped down as CEO, replaced by Gary Cohen, appointed to oversee a recovery-and-turnaround mission. Since then, the company has scrubbed most of those new-category initiatives and cut staff by 50%. Fourth-quarter revenue dropped from $308 million to $172 million, with a loss of more than $44 million; sales fell 47% in the U.S. and almost as drastically in its various international markets. Full-year revenue for 2024 was down 23%. (Amazon CEO Andy Jassy has criticized regulators’ treatment of the deal, essentially blaming them for iRobot’s subsequent woes.)
In its effort to save itself, the company has shifted focus (and more of its slimmed-down R&D resources) back to its core Roomba products. Earlier this year, iRobot said it expected to grow revenue through new (vacuum-focused) product launches, and has stated it is negotiating with lenders and actively exploring other options. This past week, it released eight new Roomba models, including mop-combo units—and its first versions equipped with LIDAR and “AI technology.” Prices, ranging from $300 to $1,000, seem more competitive with Chinese rivals.
But as the company acknowledged in its earnings release, the fresh generation of Roombas isn’t guaranteed to save the day, depending on “consumer demand, competition, macroeconomic conditions, and tariff policies.” If the robovac pioneer can’t figure out how to navigate those obstacles, it may just get swept away.