John Keilman, reporting for The Wall Street Journal (gift link):

The company that makes Roomba robotic vacuums declared bankruptcy Sunday but said its devices will continue to function normally while the company restructures.

Massachusetts-based iRobot has struggled financially for years, beset by foreign competition that made cheaper and, in the opinion of some buyers, technologically superior autonomous vacuums. When a proposed sale to Amazon.com fell through in 2024 because of regulatory concerns, the company’s share price plummeted.

Founded in 1990, iRobot’s autonomous vacuum cleaners helped pioneer robotics for consumers. Many recent versions of the Roomba have features that are controlled through the brand’s app. Some owners have worried that, similar to other products tied to the internet, their Roombas could “brick” — or stop working — if the company went under. iRobot said it anticipates no disruptions to its product support or app functionality.

Matt Stoller, author of the (generally excellent) website Big, on Twitter/X today:

iRobot is selling itself to Chinese manufacturers, a result of hedge fund attack a decade ago that gutted the company. Wall Street is a threat to our national sovereignty.

Matt Stoller, author of the (generally knee-jerk anti-acquisition) website Big, on Twitter back in 2022, when Amazon announced its intended acquisition:

Amazon just bought iRobot, which has immense amounts of data about people’s physical homes. It never ends. Congress should have passed @TomCottonAR’s bill to bar big tech mergers.

[Press release: “Amazon and iRobot sign an agreement for Amazon to acquire iRobot”]

You can’t have it both ways. If Amazon’s proposed acquisition would have gone through, iRobot, an American company, would now be a (small) subsidiary of Amazon, another American company. The acquisition did not go through, which is what Stoller wanted, and now here we are with iRobot — which in Stoller’s own description “has immense amounts of data about people’s physical homes” — in the hands of a Chinese company.

iRobot’s demise wasn’t caused by hedge fund investments a decade ago. The hedge fund vultures swooped in after the Amazon acquisition collapsed in early 2024. Here’s Connie Loizos, writing yesterday for TechCrunch:

It seemed like a fairy tale ending — the scrappy MIT spinoff absorbed into the Everything Store’s sprawling empire.

Except European regulators had other ideas. Indeed, amid threats they would block the deal — they believed Amazon could foreclose rivals by restricting or degrading access to its marketplace — Amazon and iRobot agreed to kill the deal in January 2024, with Amazon paying a $94 million breakup fee and walking away. Angle resigned. The company’s shares nosedived. It shed 31% of its workforce.

What followed afterward was a slow-motion collapse. Earnings had been declining since 2021 thanks to supply chain chaos and Chinese competitors flooding the market with cheaper robot vacuums.

iRobot didn’t get big enough on its own quickly enough. It was under fierce competitive pressure from Chinese robot vacuums. Roombas seemed groundbreaking and innovative at first, but technical progress stalled. Amazon’s hands aren’t exactly clean in terms of putting the squeeze on iRobot: the primary place where the cheaper Chinese robot vacuums were being sold was, of course, Amazon.

By 2022, the Amazon acquisition was iRobot’s lifeline. EU regulators wanted it shot down, and despite the fact that it was one American company trying to acquire another, the anti-big-tech Biden administration clearly preferred to let the deal collapse. The US should have told the EU to mind their own companies.

Now iRobot is in Chinese hands, the worst possible outcome. The Amazon acquisition wasn’t anti-competitive — it was iRobot’s last chance to remain competitive.