Between Innovation and Regulation: The Tragic Story of iRobot and the Failure of the Amazon Deal

The insolvency of iRobot after Chapter 11 in summer 2024 marked a turning point not only for the company itself but for the entire robotics industry. Founder Colin Angle sharply criticizes the role of regulatory authorities—particularly the FTC and the European Commission—in the failure of the $1.7 billion acquisition by Amazon. After 18 months of intensive review, Amazon decided in January 2024 to halt the deal. Angle describes this process as a devastating precedent that discourages future founders from pursuing acquisition plans.

The 18-Month Review: A Herculean Effort Without Success

The regulatory review of Amazon’s planned purchase caused enormous strain for both companies. Over 100,000 documents were created and submitted. iRobot invested substantial portions of its available profits to meet the requirements. Amazon, in turn, mobilized an entire team of internal and external staff, lawyers, and economists. The goal was clear: to demonstrate that the acquisition would not create a monopolistic situation.

But the message seemed to fall on deaf ears. As Angle walked through the FTC corridors, he noticed something disturbing: examiners hung printouts of blocked deals like trophies on their office doors. For an entrepreneur who had founded his company in his living room and for years lacked enough money in the bank to pay salaries, this felt deeply wrong.

The Market Dynamics Argument

Regulatory authorities argued with competition concerns. But the facts tell a different story: in the EU, iRobot held a 12 percent market share—though this was steadily declining. The largest competitor had been active on the market for only three years. In the US, the market share was higher but also decreasing. Several new competitors brought external innovations to the market. These should have been clear indicators of a vibrant, dynamic market—a case that, in Angle’s view, would have deserved three to four weeks of investigation, not a year and a half.

The Vicious Cycle of Deterrence

Angle warns of the long-term consequences of this decision. The precedent creates a permanent risk for future M&A transactions. Entrepreneurs and investors are discouraged. Deal valuations decline, and startup formation rates could suffer. As a founder, these experiences directly influence his exit strategies and commercialization plans.

The FTC certainly has an important role: to prevent abuse practices in monopolies and protect consumer interests. But when this balance is lost, the country as a whole suffers, argues Angle.

From Academic Lab Mouse to Roomba Empire

iRobot’s founding story in 1990 was characterized by idealism and scientific passion. A group of people in an academic lab asked themselves: Where are the promised robots? Co-founder Rod Brooks had developed an AI technology that could embed machine intelligence into affordable robots.

The first business idea was ambitious to the point of absurdity: a private mission to the Moon, followed by selling the film rights. This plan failed. But the developed technology led to components for NASA’s Mars Pathfinder mission—Angle’s name is literally on Mars. iRobot built robots for the Deepwater Horizon disaster in the Gulf of Mexico, developed the PackBot for military operations in Afghanistan, and after the Fukushima disaster, donated robots worth half a million dollars to Japan. These robots were the first to enter reactor doors, map radiation levels, and enable Tokyo Electric Power Company employees to perform life-saving work—while minimizing radiation exposure.

The Roomba and the Marketing Miracle

The Roomba was launched 12 years after the founding—in 2002. The first 70,000 units sold out in three months solely through press coverage. Reporters were fascinated by the idea that a vacuum robot could actually work.

The next year could have been the end. iRobot tried to triple demand—produced 300,000 units and launched TV advertising that totally missed the mark with tech nerds. After Cyber Monday, 250,000 robots sat in warehouses.

Then the unexpected happened: Pepsi launched a TV spot with Dave Chappelle, in which a Roomba humorously chases a potato chip crumb—a bizarre but viral scene. In two weeks, iRobot sold 250,000 robots. Angle summarizes: cats riding on Roombas were a big part of the success. The robot’s journey was more fragile than anyone could have imagined.

The Lidar Decision: Technology versus Vision

Years ago, iRobot could have implemented laser navigation (Lidar)—Chinese competitors like Roborock and Ecovacs had been doing so years before iRobot. But Angle made a deliberate strategic decision: to invest every cent in visual-based navigation and situational awareness. His argument: Tesla has no laser. The future is visually based. Lidar is a quick fix but not an advanced technology—it doesn’t enable true intelligence about whether a floor is actually clean.

At the same time, there were other bad decisions. iRobot hesitated in developing 2-in-1 robots (Vacuum + Mop) because it believed these functions should be separate. The market decided otherwise. And excluding itself from the Chinese market—the world’s largest consumer robotics market—was a strategic disadvantage iRobot couldn’t compensate for.

Lessons for Robotics Entrepreneurs

Angle’s advice to other founders begins with a fundamental warning: understand your market so you create something that delivers more value than it costs. Robotics is fascinating and sexy—but that’s exactly why founders are easily tempted to convince themselves that consumers should be smart enough to understand it.

A common trap: seeing robotics as a “thing” rather than as a toolbox. The temptation is great to build a humanoid robot because you dream of it—not because you want to solve a real problem. Roomba was so successful because Angle identified the problem, not because he blindly relied on humanoids.

Technology in robotics often far outpaces real business vision. The challenge is to break through the romance and arrive at practical solutions.

A New Chapter

Angle has founded a new company that is still operating in stealth mode. The focus is on consumers and the question of how to build robots with sufficient emotional intelligence—not at human level, but enough to create lasting companions for health and wellness applications.

The journey has not fundamentally changed since his days as a student when he said: “We were promised robots, and we don’t have the ones I want.” He spent 30 years building the world’s best floor-cleaning robot. Now he has the chance to create something new—with the lessons of a remarkable, if tragic, company history in tow.