China’s Picea Robotics to Sustain and Grow iRobot Brand Post-US Roomba Acquisition

Dec. 18 – Picea Robotics, the largest creditor and contract manufacturer for a major American company producing Roomba robot vacuum cleaners, plans to retain the brand of the now-bankrupt firm, which it recently agreed to acquire. The company also aims to expand its operations internationally, including within China, according to a company representative.

“What Picea values most is the brand equity and technological expertise of the company,” the spokesperson stated yesterday. The firm has extensive technological capabilities in smart navigation, mapping, automated cleaning algorithms, and integrated hardware and software solutions. They also have deep insights into household cleaning needs and consumer behaviors,” they added.

On December 14, the company filed for Chapter 11 bankruptcy protection in Delaware, facing growing competition from Chinese competitors. Simultaneously, it signed an agreement with Picea, which will convert its debt claims into 100% equity through a court-supervised restructuring process.

“We hope Picea and the company can collaborate to grow the smart cleaning robot market, allowing more families to experience robot vacuums, especially since their market penetration remains below 10 percent worldwide,” the spokesperson noted.

For the first time in nine months ending September 30, the company dropped out of the top five global suppliers of robot vacuum cleaners, with Chinese brands taking the top spots, according to data from International Data Corporation. The leading company, Stone Technology, held a 22 percent share, followed by Ecovacs Robotics with 14 percent, Dreame Technology with 12 percent, Xiaomi with 10 percent, and Narwal Robotics with 7.5 percent.

Last month, Picea acquired $190.7 million of the company’s debt from an American investment firm, making it the firm’s largest creditor. This, combined with the $161.5 million it was already owed for manufacturing costs, positions Picea as a significant stakeholder. The company has also extended its covenant waivers until January 15.

Furthermore, Picea secured regional distribution rights for the company in China last August, positioning itself ahead of the acquisition. The Chinese firm is one of the world’s top original design manufacturers of robot vacuum cleaners, with robust overseas supply chain capabilities. It ships over 6.5 million units annually and generates more than $20 million in sales.

If the deal proceeds smoothly, Picea could significantly influence the competitive landscape of the global and North American robot vacuum market, where the company currently holds around 20 to 30 percent of the market share, according to an industry insider.

“The sector is still in the growth phase, focusing on expanding the overall market rather than dividing an existing one,” a Picea representative mentioned. With the worldwide penetration rate for robot vacuums below 10 percent, partnerships aimed at market expansion and product enhancement are more critical than fierce competition.

The overall impact of the integration on market dynamics will ultimately depend on future technological synergies, product execution, and the efficiency of global operations, according to Stone Technology.

Industry analysts have identified strategic missteps in technology direction and tariff pressures as primary reasons for the company’s difficulties. The firm previously relied heavily on visual navigation technology and missed the shift toward laser and hybrid navigation systems. Additionally, rising tariffs in the United States have significantly increased operational costs.

In 2019, the founder of the company stated that a 10 percent tariff increased costs by approximately $25 million annually. Due to supply chain relocations and tariff risks, the company began posting losses in 2021, totaling $240 million in 2022.

To avoid tariffs, the company shifted manufacturing from China to Malaysia and Vietnam. However, when the U.S. imposed tariffs of up to 46 percent on imports from Vietnam earlier this year, it incurred an additional $23 million in costs.