The inventor of robotic vacuums has collapsed into bankruptcy, with its stock plummeting over 70% in premarket trading and triggering a circuit breaker after the U.S. market opened. The company's market capitalization now stands at just 300 million yuan (approximately $42 million).

Roomba maker iRobot has filed for Chapter 11 bankruptcy protection while advancing plans to be acquired by its primary contract manufacturer, Shenzhen Picea Robotics (also known as Shenzhen Cedar Robotics). The deal would take the company private.

iRobot disclosed it had raised concerns about its ability to continue operations in March 2024. The Delaware bankruptcy filing cites pressure from low-cost competitors and the impact of new U.S. tariffs as primary causes.

Despite generating $682 million in 2024 revenue, iRobot's profits were severely eroded by competition, particularly from Chinese rivals like Ecovacs. While maintaining leadership in core markets including the U.S. and Japan, the company was forced to slash prices while investing heavily in technology upgrades—details confirmed in its court filings.

New U.S. tariffs, especially a 46% duty on Vietnamese imports, dealt another blow. iRobot manufactures U.S.-bound vacuums in Vietnam, with the tariffs adding $23 million in costs for 2025 and complicating long-term planning, according to court documents.

The company was previously the target of a $1.4 billion acquisition by Amazon.com, which ultimately fell through. iRobot currently carries $190 million in debt, primarily from a 2023 loan used for operational refinancing. European antitrust scrutiny contributed to the Amazon deal's collapse.

After the Amazon deal failed and iRobot defaulted on payments to Shenzhen Cedar Robotics, the Chinese manufacturer acquired iRobot's debt from investment funds managed by Carlyle Group.

Under the restructuring plan, Shenzhen Cedar Robotics will obtain 100% ownership of iRobot while canceling the remaining $190 million loan balance. An additional $74 million in manufacturing-related debt will also be forgiven. Other creditors and suppliers will reportedly receive full repayment.

iRobot stated the bankruptcy won't affect its app functionality, customer programs, global partnerships, supply chain operations, or product support.

At its 2021 peak during pandemic-driven demand, iRobot was valued at $3.56 billion. Founded in 1990 by three MIT robotics experts, the company initially focused on defense and aerospace before achieving mainstream success with its 2002 Roomba launch. The Roomba maintains 42% U.S. and 65% Japanese market shares in robotic vacuums, according to company data.

Headquartered in Bedford, Massachusetts, iRobot currently employs 274 people, court filings show.