iRobot just filed for bankruptcy: Here's what happens to your Roomba now

Roomba has, over the past decades, become the colloquial term for household robot vacuums. Despite its success, the company behind the product lineup is facing an economic downturn.

Roomba’s seller, iRobot, recently announced (via The Verge) that it has filed for bankruptcy in the District of Delaware. However, iRobot is using Chapter 11 terms, which means that the business is likely to continue to exist rather than being liquidated to pay back its debtors. Instead, iRobot will transfer 100% of the business ownership to its primary manufacturers, Shenzhen PICEA Robotics Co. Ltd. and Santrum Hong Kong Co. Ltd., who will hold the rights collectively under the name Picea.

Following the approval from the Delaware Court, iRobot intends to operate privately under the new owners. This transaction, the company says, will allow it to “continue operating in the ordinary course, pursue its product development roadmap, and maintain its global footprint.”

iRobot further ensures that the transfer of ownership will not disrupt Roomba owners’ usage. It says the transaction will have “no anticipated disruption to its app functionality, customer programs, global partners, supply chain relationships, or ongoing product support.”

In its announcement, the company said that the deal will allow it to fix its balance sheet woes and restore its “ability to invest in its next generation of robotics, smart home innovations, and customer experience enhancements.” However, this move means iRobot will transition to private ownership and cease trading on NASDAQ or any other national stock market exchange.

The announcement follows iRobot’s recent struggles to keep the business profitable. In its third-quarter earnings, the company noted its revenue had fallen “well below our internal expectations due to continuing market headwinds, ongoing production delays, and unforeseen shipping disruptions.” The company’s revenue has continued to stall consistently after Amazon had to back out of its planned $1.7 billion acquisition of iRobot in early 2024 after failing to secure approval from the European Union. Meanwhile, stiff competition from Chinese rivals hasn’t done much to alleviate those troubles either.