In August 2022, Amazon announced the acquisition of iRobot for $1.7 billion. The operation was to symbolize the convergence between artificial intelligence, connected home and predictive commerce. Two years later, a completely different scenario is playing out, the pioneer of the domestic robot is now on the verge of default, strangled by toxic debt and an exhausted economic model.
The Amazon mirage
For iRobot, this acquisition was to mark a turning point, by integrating the Amazon ecosystem, the company founded in 1990 by Rodney Brooks, Colin Angle and Helen Greiner hoped to find a second wind after several years of stagnation. The acquisition would have made it possible to consolidate its presence in connected homes, while benefiting from the distribution capabilities of the Seattle firm.
But from 2023, the file faces distrust from European authorities, Brussels fears that the operation will strengthen Amazon’s dominant position in the market of connected objects and online retail. Under pressure from regulators, the American giant ended up withdrawing in January 2024. iRobot shares immediately collapsed by 26% in pre-market. In a few hours, the company goes from being a strategic target to being an actor in distress.
A weakened model even before failure
Competed by Chinese manufacturers Ecovacs, Roborock and Dreame, iRobot saw its technological advantage erode during its planned sale to Amazon. The market for robot vacuum cleaners has become commonplace, driven down by a price war in which Roomba no longer plays the leading role. The company, once a symbol of mainstream innovation, has failed to transform its initial lead into lasting advantage.
The Carlyle debt, from support to trap
To finance its operations pending the takeover, iRobot takes out a $200 million loan from The Carlyle Group in 2023. Financing at an exceptionally high cost, nine points above SOFR, or more than 14% annual interest. This credit was supposed to provide temporary relief, but turned into a structural trap.
In its latest 8-K report, the company announces that it has negotiated a new credit agreement, with a waiver, valid until December 1, 2025. In other words, iRobot would no longer be able to guarantee its survival beyond this deadline. Without a new extension granted by Carlyle, payment default will be inexorable. As of June 28, 2025, the debt reached $203.2 million, for only $40.6 million in available cash. The 40 million paid by Amazon as termination compensation have already been used in full.
A dead-end strategic review
The board of directors is exploring refinancing or sale scenarios, but the last potential buyer withdrew in the fall after several months of exclusive negotiations. According to documents filed with the SEC, the price offered was well below the stock’s market price, a sign of a deep disconnect between market perception and financial reality.
The company today finds itself very isolated, without liquidity, without a buyer and under the supervision of a single creditor. The specter of bankruptcy proceedings is now openly discussed.
When redemption becomes poison
The story of iRobot illustrates a recurring scenario in tech, that of total dependence on a life-saving acquisition. By betting everything on a buyout, the company suspended its internal strategy, froze its investments and made decisions dictated by the expectation of an external event. When the deal fell through, there was no plan B or room for maneuver left.
In a context where antitrust authorities are increasing blockages, Adobe/Figma, Nvidia/ARM, Visa/Plaid, acquisitions can no longer be considered as rescue plans. On the contrary, they are becoming considered a major risk for already weakened companies.
Lessons from a Shipwreck
iRobot collapsed due to lack of an autonomy strategy, under pressure from Carlyle and banking covenants, it now only has a short horizon, that of December 1, 2025, the date on which its survival will depend on a new concession from its creditors. A textbook case of strategic dependence, and a warning for all companies tempted to confuse buyout and resilience.
