Roomba parent files bankruptcy, Chinese supplier gains control

The maker of Roomba robotic vacuum cleaners, iRobot Corp., has filed for Chapter 11 bankruptcy in the US. It assured customers that its devices would continue to work normally during the restructuring process.

The Massachusetts-based company said it plans to hand over control to its main Chinese supplier, Shenzhen PICEA Robotics Co., and one of its subsidiaries. As part of the plan, iRobot’s existing shareholders will lose their stock.

Founded in 1990 by MIT engineers, iRobot changed home cleaning when it launched the Roomba in 2002. It has sold over 40 million robots.

However, business slowed after the COVID-19 pandemic. Supply chain problems, rising costs, and cheaper competitors hurt sales and profits.

The company owes $352 million to Picea, its main contract manufacturer operating in China and Vietnam. About $91 million of that debt is already overdue.

In 2022, Amazon offered to buy iRobot, but the deal failed after European Union regulators raised competition concerns. iRobot received over $90 million after the deal collapsed, but it used much of that money to pay fees and reduce debt.

The company said the bankruptcy process will allow it to keep operating, pay employees, and meet payments to suppliers while it restructures its finances.