Boston: iRobot, the US-based company renowned for creating the Roomba smart vacuum cleaner, has filed for bankruptcy due to competition from Chinese rivals and tariffs impacting its financial stability. The company will transition under the ownership of Shenzhen-based Picea Robotics through a "pre-packaged Chapter 11 process."

According to Anadolu Agency, iRobot faced pressure to reduce its prices and invest heavily in new technology amidst the challenging business environment. The majority of iRobot's products for the US market are manufactured in Vietnam, where tariffs of 46% imposed by the US have increased the company's costs by $23 million this year.

In 2021, the pandemic spurred high demand for iRobot's products, valuing the company at $3.56 billion. However, its current valuation has plummeted to approximately $140 million. Despite the bankruptcy filing, iRobot assured that its app, supply chains, and product support are not expected to be impacted.

Founded in 1990 by three Massachusetts Institute of Technology (MIT) Artificial Intelligence Lab members, iRobot launched the Roomba in 2002. The company claims that the Roomba occupies about 42% of the robotic vacuum cleaner market in the US and 65% in Japan.

Last year, the European Union's competition watchdog blocked Amazon's proposed $1.7 billion acquisition of iRobot. Many companies, including iRobot, have experienced increased costs due to trade tariffs imposed by US President Donald Trump on imported goods. Trump has argued that these tariffs would boost American manufacturing and job creation.

Picea Robotics, the acquiring firm, is a robotic vacuum cleaner manufacturer with production and research facilities in Vietnam and China. The company has sold over 20 million robotic vacuum cleaners and employs over 7,000 people worldwide.