One year and A year and a half after announcing its intention to acquire iRobot, the Amazon deal is officially dead. All parties involved expected some level of regulatory scrutiny, but after a few decades of consolidating tech companies, few expected so much friction. The deal had already passed select international regulators, including the UK, in the end, but the European Union’s recent crackdown on perceived anti-competitive mergers and acquisitions proved to be the final nail in the coffin. This morning’s news also finds iRobot laying off 350 people – nearly a third of its total workforce – as longtime CEO Colin Angle steps down.
“iRobot is an innovation leader with a clear vision to make consumer robots a reality,” Angle said in a statement. “The resolution of the Amazon deal is disappointing, but iRobot now looks to the future with focus and commitment to continue building thoughtful robots and smart home innovations that make life better and that our customers around the world love.”
The deal has already taken a toll on the company, including two rounds of layoffs. Last July, Amazon cut its purchase price by 15%, from $1.7 billion to $1.4 billion. The news came as iRobot announced it was raising $200 million to continue operations after the original deal closed.
“iRobot is taking on new financing that we believe is sufficient to support our operations in a highly competitive environment and meet our liquidity needs as well as repay iRobot’s existing debt,” Angle said at the time.
The phrase “hypercompetitive environment” is typical. It effectively does two things. It explains the need for fresh cash amid financial struggles that preceded the takeover announcement. He also talks about the broader regulatory scrutiny surrounding the deal. When it was first announced, there were two main sticking points among critics.
The first and least discussed was privacy. Roombas have mapping capabilities, and Amazon has often been criticized for its decisions to offer security footage from the Ring camera to law enforcement. The idea of the company entering private homes in this way is understandable given that many supporters have stopped.
The second and ultimately biggest sticking point is competition. Amazon has the largest online retail billboard. The company could, in theory, market Roombas in a way that eliminated the “super” competition.
There’s no doubt, of course, that the environment is dramatically more competitive than the one iRobot entered 20 years ago. When iRobot finally found its groove in the robot space after years of false starts (including baby dolls and lunar rovers, to name a few), the company finally hit what — to this day — remains its only successful home robot on a meaningful scale. Angle likes to say that he finally found success as a roboticist after becoming a vacuum salesman. It’s a cute line that touches the heart of an industry that requires identifying needs in other areas that most roboticists are not well versed in.
After two decades, robot vacuums exist on their own island. This is certainly not due to a lack of effort on the part of iRobot or the competition. It seems like every year another robot “companion” comes and goes. Nor can the issue be blamed on lack of demand. Above all, it is a technological problem. There are currently many limitations to the functionality of hardware automation that is affordable for consumers – and that likely won’t change anytime soon.
Image Credits: Amazon
Check out Amazon’s Astro robot. It’s cute, it’s exciting, it does some interesting things (the periscope security camera is a really clever innovation that overcomes the Roomba’s limited advantage). But it didn’t exactly set the world on fire. At this point, it is perhaps best classified as an interesting experiment. That’s not to say Amazon is done with this or other home robots (they’re not), but for now it seems like an evolutionary dead end. I would, however, like to be proven wrong here.
Meanwhile, there are now dozens of robot vacuums. Some come from bigger names like Samsung and Dyson, while much cheaper models have flooded the market. Search for “cheap robot vacuum cleaner” on Amazon and you’ll find a ton of options under $100. iRobot’s focus, on the other hand, has pushed the latest technology, resulting in robots costing about 10x the amount when you factor in things like the self-cleaning bin.
iRobot has certainly felt the sting of the category it created. Remember Looj gutter cleaning or Verro pool cleaning? Over the years, the company has tried to apply Roomba’s successes to different parts of the home with an uneven record of success. Meanwhile, the Terra lawnmower has been hit hard by Covid and supply chain constraints. It was put indefinitely on ice nearly four years ago, and this morning’s news doesn’t bode well for the project’s future.
That decision, of course, will ultimately rest with the person who takes over as the second CEO in iRobot’s 34-year history. Currently, executive vice president Glen Weinstein is taking on the interim role.
Redundancies should always be lamented for the toll they take on individuals, who are too often singled out arbitrarily. This is absolutely true of the multiple rounds iRobot has been through over the past few years. Since its founding in 1990, the company has been one of the pillars of Greater Boston’s thriving robotics ecosystem. A year or two after I started, TechCrunch hosted a private dinner for Boston’s robotics luminaries, and it seemed like almost every guest had been involved with iRobot in one way or another over the years.
Boston robotics will be okay after all. These extremely talented individuals who are no longer with the company will form the next generation of world-changing robotics startups. This is sad, harsh news, but I’m not too worried about these smart and capable people at the end of the day. They will do great things. Nor am I particularly worried about the future of the home robot. It’s had a slow start that may take even longer, but soon enough we’ll see key breakthroughs in artificial intelligence, navigation and mobile manipulation that will create a new crop of capable home robots.
Hopefully, despite its struggles, iRobot will continue to play a key role in this world.
