End of an era: How regulators changed the fate of iRobot and what it means for the robotics industry

Bankruptcy of iRobot last Sunday closed a chapter of an era for one of the most significant technology brands in the world. The manufacturer of the device that became synonymous with home automation over two decades fell victim to an unprecedented regulatory opposition—in the opinion of its founder—not due to technological errors or business collapse, but due to Amazon’s decision to withdraw its $1.7 billion acquisition following an 18-month investigation by the FTC and European authorities.

The acquisition that never materialized

The story of this merger begins with converging interests. iRobot, holding a 12% share in the European market—though declining—and a stronger position in the United States, was facing increasingly dynamic competition. Chinese companies like Roborock and Ecovacs were introducing innovative lidar navigation solutions, forcing a faster transformation. Amazon saw an opportunity—combining robotics expertise with the e-commerce giant’s logistics infrastructure could open new possibilities.

However, regulatory procedures stretched from the typical three to four weeks to 18 months of waiting. Teams of lawyers and economists worked tirelessly, processing over 100,000 documents to prove that the merger would not create a monopoly. Ironically, when Colin Angle testified before the commission, he symbolically displayed blocked transactions—like trophies on examiners’ doors.

A deterrent effect for the entire industry

For an entrepreneur who built iRobot in a home living room without guaranteed salaries, witnessing every blocked merger celebrated as a victory was astonishing. After all, mergers and acquisitions are the main drivers of value in the innovation economy. The message is clear for the entire startup ecosystem: the path to M&A exit has become less certain.

Angle directly speaks of a deterrent effect—entrepreneurs now have to consider the risk, venture capital investors are overestimating valuations, and the pace of new company formation is slowing. This message is spreading throughout the tech industry, where growth strategies through acquisitions have been the norm.

From initial madness to global impact

The story of iRobot itself is a instructive narrative about flexibility and perseverance. Roomba appeared only 12 years after the company was founded, when a team from an academic laboratory—led by AI pioneer Rod Brooks—decided: if robots are promised to us, where do they come from?

The first marketing campaign was accidental. After producing 300,000 units and filling warehouses with unsold robots, salvation came—an advertising campaign for Pepsi featuring Dave Chappelle. Roomba roaming over chips, eating vacuums, dropped pants. The madness went viral, and cats riding Roombas became a phenomenon that had little to do with marketing plans, driven instead by organic consumer engagement.

But before iRobot achieved dominance in the consumer segment, the company contributed to missions close to non-profit work: robots in the Gulf of Mexico after the Deepwater Horizon disaster, PackBot in military operations in Afghanistan, robots in Fukushima after the reactor accident—these projects were changing reality.

Strategic choices: vision-based navigation instead of lidar

A key decision was to stick with vision-based navigation instead of lidar, which Chinese competitors were using to dominate the market. Angle defends this choice comparing it to Tesla’s approach—lasers are a quick solution, but vision is the way to truly understand the environment. However, delays in creating a 2-in-1 robot that combines mopping and vacuuming became a problem when consumers showed a different preference.

Lack of access to the Chinese market, the largest in the world for consumer robotics, deepened competitive challenges. All of this created a scenario where Amazon’s acquisition was a lifeline—but regulators stood in the way.

Lessons for the new wave of entrepreneurs

Angle now has a clear message for other creators in the robotics industry: understand the market, not just the technology; build value exceeding costs; don’t fall in love with technology for its own sake.

The paradox of robotics is that technology often outpaces the business plans for its application. It’s easy to build a humanoid—harder to find a problem it solves better than something simpler and cheaper. Roomba cost 10,000 times less than a hypothetical humanoid pushing a vacuum, even though initially people didn’t consider it a “real robot.”

A new chapter

Angle himself did not give up. Immediately after the bankruptcy of iRobot, he founded a new stealth-mode company focused on consumer robotics with elements of social and emotional interaction. Instead of cleaning floors, he is now thinking about applications related to health and well-being.

“Not much has changed since my student days when I said: we were promised robots,” says Angle. Three decades dedicated to building the best cleaning robot in the world now result in a vision of entirely new possibilities. But the question for the entire industry remains: will the precedent of the blocked iRobot acquisition change the calculus around M&A in tech? Will investors and entrepreneurs learn to live with greater risk, or will this be a turning point for regulation?