The Uncomfortable Truth: iRobot Bankruptcy Shows Your OEM Can Become Your Owner
- maggieahaadvisor
- Dec 17, 2025
- 4 min read
iRobot did not end up here because it made one dramatic choice. Its bankruptcy because a lot of choices disappeared.
On December 14, 2025, iRobot filed for Chapter 11 bankruptcy protection aand said it plans to be acquired through the process by Picea, its main contract manufacturer and also a secured lender. That detail matters more than the headlines. A supplier is one thing. A supplier who is also a creditor is something else.
This is not a story about “a factory takeover.” It is a story about leverage and what happens when you run out of runway.
The part people forget: Amazon really did try to buy iRobot
In August 2022, Amazon announced a deal to acquire iRobot.
That deal was later terminated on January 29, 2024. Amazon paid a 94 million dollar termination fee.
So what changed?
Why the Amazon iRobot acquisition failed
The simplest explanation is this.
Amazon is not just a buyer. Amazon is also a major marketplace where competing robot vacuum brands sell. Regulators were worried that if Amazon owned iRobot, it could make life harder for rival brands on Amazon’s store.
The European Commission laid out concerns along those lines and issued a formal statement of objections in late 2023.
By January 2024, Amazon said there was no realistic path to approval in the EU and the deal ended.
You do not need to love regulation to understand the logic. If one company controls the shelf and also owns a product on the shelf, everyone asks what happens to the other products.
After the deal died, the situation got tighter
Once the Amazon deal ended, iRobot still had to survive in a market that had become unforgiving.
Reuters reported iRobot was getting pressured by lower cost competition. It also faced added costs in 2025 from tariffs, including a 46 percent levy on Vietnamese imports that increased costs that year.
Then there is the funding side.
Reuters also reported iRobot had a 2023 loan with about 190 million dollars remaining. Under the bankruptcy plan, Picea takes ownership while cancelling that debt and other amounts owed under the manufacturing relationship.
That is how you get the outcome people are reacting to.
The manufacturer is not only the manufacturer. The manufacturer is also the creditor. In a restructuring, creditors usually get the steering wheel.
The uncomfortable truth for product brands
Most teams think about OEMs like this.
Can they build it? Can they hit quality? Can they ship on time? Can they reduce cost?
That is the normal checklist. It is also incomplete.
Because in the real world, supply chain can turn into finance.
You start with payment terms. Then you lean on credit. Then you push inventory risk onto the supplier. Then one bad year becomes two. Then you need a bridge. Then your “partner” is also the party you owe money to.
At that point, you are not only managing operations. You are managing power.
iRobot is a big, public example of a smaller pattern that shows up all the time in hardware and consumer products.
When your exit fails and cash is tight, you take the option that keeps the lights on. Not the option that looks best on a slide.
What to take from iRobot’s bankruptcy
Do not build your whole exit around one buyer
Even a signed, announced deal can fail late. The iRobot Amazon deal ran from 2022 to 2024 and still ended.
What to do instead:
Keep a live list of Plan B outcomes. Update it while things are calm. A second strategic. A financial buyer. A regional player. Licensing. A carve out. Anything that creates options.
If the buyer controls distribution, expect friction
This is the main lesson from the Amazon angle.
When a buyer also controls the marketplace, regulators will look at what happens to competitors after the acquisition. The EU concern was essentially about rivals being disadvantaged on Amazon’s platform.
What to do instead:
If your category relies on one dominant platform, bake that risk into deal planning early. It changes timeline, probability, and leverage.
Treat OEM credit like real financing
If your OEM is financing you, that is not a nice side benefit. It is a capital relationship.
And capital relationships have consequences when performance drops.
What to do instead:
Model a bad year on purpose. Sales down 25 percent. Margin down 5 points. Inventory builds. Ask who has leverage, and what they can demand.
Reduce single point dependency before you need to
Dual sourcing is annoying. Backup logistics is annoying. Channel mix is annoying.
Until it is not.
What to do instead:
Pick one dependency each quarter and reduce it. Second source one component. Shift some sales off one platform. Tighten tooling and IP terms. Small moves add up.
A quick checklist you can steal
Ask these five questions and answer them honestly.
Do we have more than one realistic exit path?
Are we over dependent on one platform or one channel?
Are supplier terms quietly becoming financing?
If sales drop fast, who gets leverage over us?
If our main OEM walked away, what breaks first?
If this checklist feels uncomfortable, that is the point. Comfort is not a strategy.
Final thought
The iRobot story is not just about robot vacuums. It is about what happens when a business depends heavily on a supply chain partner and then runs out of room to negotiate.
Your OEM can be a great partner. Just do not pretend it is only an OEM.
If you want a second opinion on your OEM and platform risk, Aha! Advisory is here for you. Check out our advisory plan: one time fee, no upsells, no hidden costs.
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